UBS AG Files Annual Report (Foreign Issuer)
UBS AG has filed its 2025 Form 20-F annual report, using International Financial Reporting Standards as issued by the IASB and a reduced disclosure format available to certain foreign issuers.
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Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
20-F
Rhea-AI Filing Summary
UBS AG has filed its 2025 Form 20-F annual report, using International Financial Reporting Standards as issued by the IASB and a reduced disclosure format available to certain foreign issuers. As of 31 December 2025, UBS had 3,858,408,466 ordinary shares outstanding, with a par value of USD 0.10 per share and no treasury shares.
The filing cross‑references the detailed 2025 Annual Report for risk factors, business overview, market risk disclosures and consolidated financial statements. It lists a broad range of ETRACS exchange‑traded notes and other debt securities registered on US exchanges, while confirming UBS AG itself has no equity class registered in the US.
UBS reports group personnel of 61,899 full‑time equivalents at year‑end 2025, broken down by Global Wealth Management, Personal & Corporate Banking, Asset Management, the Investment Bank, Non‑Core and Legacy, and Group functions. The report also summarizes intra‑group mergers involving Credit Suisse entities in Switzerland and the US, under which all assets and liabilities of those entities transferred to UBS AG, UBS Switzerland AG and UBS Americas Inc without consideration as they were wholly owned within the group.
Insights
UBS’s 2025 Form 20-F formalizes post‑Credit Suisse integration and confirms its capital and workforce scale.
UBS AG uses this Form 20-F to anchor its 2025 Annual Report for US investors, confirming IFRS reporting and linking to detailed risk, capital and market risk sections. It also clarifies that UBS AG has no US‑registered equity class, focusing instead on listed ETN and debt programs.
The filing highlights intra‑group mergers where Credit Suisse AG and Credit Suisse (Schweiz) AG were absorbed into UBS AG and UBS Switzerland AG in 2024, and a later merger of UBS Americas Inc with Credit Suisse (USA) LLC effective 2 February 2026. All were executed on a simplified, no‑consideration basis within the same parent group, consolidating assets and liabilities under UBS entities.
Workforce disclosure shows 61,899 full‑time equivalents at 31 December 2025, with sizable headcount in Global Wealth Management, Personal & Corporate Banking and Group functions, and a much smaller Non‑Core and Legacy unit, indicating continued run‑off of legacy portfolios. Future company reports will show how these structural changes feed through to segment performance, capital ratios and risk metrics referenced throughout the Annual Report.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Annual Report 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
☑
EXCHANGE ACT OF 1934
For the fiscal year ended
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number:
(Jurisdiction of Incorporation or Organization)
,
,
,
,
(Address of Principal Executive Offices)
UBS AG meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K, as applied to annual
reports on Form 20-F, and is therefore filing this Form 20-F with the reduced disclosure format.
,
Telephone:
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Please see page 3.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Please see page 3.
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Please see page 3.
Annual Report 2025
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of 31 December 2025:
UBS AG
Ordinary shares, par value USD 0.10 per share:
(none of which are treasury shares)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
☐
☑
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes
☐
☑
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing requirements for the past 90 days.
☑
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
☑
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an
emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
☑
☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b).
☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing.
Annual Report 2025
U.S. GAAP
☐
Standards Board
☑
Other
☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow.
Item 17
☐
Item 18
☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act)
Yes
☐
☑
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
symbol(s)
Name of each
exchange on
which registered
ETRACS Alerian MLP Index ETN Series B due July 18, 2042
AMUB
NYSE Arca
ETRACS Quarterly Pay 1.5x Leveraged MarketVector BDC Liquid Index ETN due June 10,
2050
BDCX
NYSE Arca
ETRACS MarketVector Business Development Companies Liquid Index ETN due April 26,
2041
BDCZ
NYSE Arca
ETRACS Monthly Pay 1.5x Leveraged Closed-End Fund Index ETN due June 10, 2050
CEFD
NYSE Arca
ETRACS Monthly Pay 2xLeveraged US High Dividend Low Volatility ETN Series B due
October 21, 2049
HDLB
NYSE Arca
ETRACS IFED Invest with the Fed TR Index ETN due September 15, 2061
IFED
NYSE Arca
ETRACS 2x Leveraged US Value Factor TR ETN due February 9, 2051
IWDL
NYSE Arca
ETRACS 2x Leveraged US Growth Factor TR ETN due February 9, 2051
IWFL
NYSE Arca
ETRACS 2x Leveraged US Size Factor TR ETN due February 9, 2051
IWML
NYSE Arca
E-TRACS Alerian MLP Infrastructure Index Series B due April 2, 2040
MLPB
NYSE Arca
ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN due June 10, 2050
MLPR
NYSE Arca
ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN due February 9, 2051
MTUL
NYSE Arca
ETRACS Monthly Pay 1.5x Leveraged Mortgage REIT ETN due June 10, 2050
MVRL
NYSE Arca
ETRACS Monthly Pay 2xLeveraged Preferred Stock ETN due September 25, 2048
PFFL
NYSE Arca
ETRACS 2x Leveraged MSCI US Quality Factor TR ETN due February 9, 2051
QULL
NYSE Arca
ETRACS 2x Leveraged US Dividend Factor TR ETN due February 9, 2051
SCDL
NYSE Arca
ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN Series B due
November 10, 2048
SMHB
NYSE Arca
ETRACS CMCI Total Return ETN Series B due April 5, 2038
UCIB
NYSE Arca
ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN due February 9, 2051
USML
NYSE Arca
ETRACS Gold Shares Covered Call ETN due February 2, 2033
GLDI
NASDAQ
ETRACS Silver Shares Covered Call ETN due April 21, 2033
SLVO
NASDAQ
ETRACS Crude Oil Shares Covered Call ETN due April 24, 2037
USOI
NASDAQ
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Annual Report 2025
Cautionary Statement:
Refer to the
Cautionary Statement Regarding Forward-Looking Statements
Report 2025 (page 265).
Cross-reference table
Set forth below are the respective items of SEC Form 20-F, and the locations in this document where the corresponding
information can be found.
●
Annual Report
●
Supplement
refers to certain supplemental information contained in this forepart of the Form 20-F, starting on page 9
following the cross-reference table.
●
Financial Statements
refers to the consolidated financial statements of UBS AG, contained in the Annual Report.
In the cross-reference table below, page numbers refer either to the Annual Report or the Supplement, as noted.
Please see page 3 of the Annual Report for definitions of terms used in this Form 20-F relating to UBS.
Form 20-F item
Response or location in this filing
Item 1
. Identity of Directors,
Senior Management and
Advisors.
Not applicable.
Item 2
. Offer Statistics and
Expected Timetable.
Not applicable.
Item 3.
B – Capitalization and
Indebtedness.
Not applicable.
C – Reasons for the Offer and
Use of Proceeds.
Not applicable.
D – Risk Factors.
Annual Report,
(24-35).
Item 4
. Information on the Company.
A
– History and Development
of the Company
Not required under the reduced disclosure format.
B – Business Overview.
Annual Report,
Our businesses
C – Organizational Structure.
Not required under the reduced disclosure format.
D – Property, Plant and
Equipment.
Annual Report,
Property, plant and equipment
(251).
Information required by SEC
Regulation S-K Part 1400
Annual Report,
Information required by Subpart 1400 of Regulation S-K
(252-257),
Loss
history statistics
(72-73), and Note 9 to the Financial Statements (
Financial assets at
amortized cost and other positions in scope of expected credit loss measurement)
175).
Item 4A
. Unresolved Staff
Comments.
None.
Item 5
. Operating and Financial Review and Prospects.
A
– Operating Results.
Annual Report,
Financial and operating performance
Statements (
Summary of material accounting policies
) (146-162).
B – Liquidity and Capital
Resources.
Not required under the reduced disclosure format.
C—Research and Development,
Patents and Licenses, etc.
Not required under the reduced disclosure format.
D—Trend Information.
Not required under the reduced disclosure format.
E—Critical Accounting
Estimates
Not applicable.
Item 6.
A
– Directors and Senior
Management.
Not required under the reduced disclosure format.
B – Compensation.
Not required under the reduced disclosure format.
C – Board practices.
1: Annual Report,
Board of Directors
(110-119). The term of office for members of the
Board of Directors and its Chairman expires after completion of the next Annual General
Meeting.
2: Annual Report,
Change of control and defense measures
Financial Statements (
Related parties
) (240-242).
3: Annual Report,
Audit Committee
Compensation Committee
(118), and
Auditors
(129-131).
Annual Report 2025
D—Employees.
Not required under the reduced disclosure format, however, UBS AG provides the
following:
UBS AG consolidated personnel by business division and Group functions
As of
Full-time equivalents
31.12.25
31.12.24
31.12.23
Personnel (full-time equivalents)
61,899
68,982
47,590
Global Wealth Management
26,879
28,052
22,904
Personal & Corporate Banking
9,585
9,548
4,954
Asset Management
2,785
2,904
2,369
Investment Bank
8,457
8,474
6,966
Non-Core and Legacy
349
1,804
53
Group functions
13,843
18,200
10,344
E—Share Ownership.
Not required under the reduced disclosure format.
F—Disclosure of a registrant’s
action to recover erroneously
awarded compensation.
Not applicable.
Item 7.
A—Major Shareholders.
Not required under the reduced disclosure format.
B—Related Party Transactions.
Not required under the reduced disclosure format.
C—Interests of Experts and
Counsel.
Not applicable.
Item 8
. Financial Information.
A—Consolidated Statements
and Other Financial Information.
1, 2, 3, 4: Please see Item 18 of this Form 20-F.
5: Not applicable.
6: Annual Report,
Our businesses
Financial and operating performance
and Note 2b to the Financial Statements (
Segment reporting by geographic location
)
(165).
7: Annual Report, Note 17 to the Financial Statements (
Provisions and contingent
liabilities
) (182-188).
For developments during the year, please see also the note
Provisions and contingent
liabilities
reports for the first, second and third quarters 2025, filed on Forms 6-K dated May 8,
2025, August 5, 2025 and November 4, 2025, respectively. The disclosures in each such
quarterly report speak only as of their respective dates.
8: Annual Report,
(109).
B—Significant Changes.
None.
Item 9
. The Offer and Listing.
A
– Offer and Listing Details.
Not applicable.
B—Plan of Distribution.
Not applicable.
C—Markets.
Cover page (3). UBS AG shares are not listed.
D—Selling Shareholders.
Not applicable.
E—Dilution.
Not applicable.
F—Expenses of the Issue.
Not applicable.
Item 10
. Additional Information.
A—Share Capital.
Not applicable.
B—Memorandum and Articles
of Association.
1: Supplement (10-13).
2: Supplement (10-13).
3: Annual Report,
Share
capital structure
(108-109),
Shareholders' participation rights
(109), and
Elections and terms of office
4: Supplement (10-13).
5: Supplement (10-13).
6: Annual report,
Share
capital structure
(108-109), and
Shareholders’ participation
rights
7: Annual Report,
Change of control and defense measures
8: There is no requirement for UBS AG shareholders to disclose ownership, as UBS AG
shares are not listed.
9: Supplement (10-13) and Annual Report,
Share
capital structure
(108-109),
Shareholders' participation rights
Elections and terms of office
Change of
control and defense measures
10: Supplement (10-13).
Annual Report 2025
C—Material Contracts.
UBS AG entered into a definitive merger agreement with Credit Suisse AG on 7
December 2023, which was filed as Exhibit 4.3 to UBS AG's Annual Report on Form 20-
F for the fiscal year ended December 31, 2023. Also, UBS Switzerland AG and Credit
Suisse (Schweiz) AG entered into a merger agreement on 9 February 2024, which was
filed as Exhibit 4.4 to UBS AG's Annual Report on Form 20-F for the fiscal year ended
December 31, 2023. The mergers described in these agreements were carried out with
some procedural simplifications and without any consideration given that both companies
were, at the time of merger, wholly-owned by the same parent entity. Upon completion
on 31 May 2024 for UBS AG and on 1 July 2024 for UBS Switzerland AG, all assets and
liabilities of Credit Suisse AG and Credit Suisse (Schweiz) AG, respectively, were
transferred automatically to UBS AG and UBS Switzerland AG, respectively.
UBS Americas Inc and Credit Suisse (USA) LLC entered into a merger agreement on 2
February 2026 which became effective on that date. The merger was on a simplified basis
and without any consideration given that both companies were, at the time of merger,
wholly-owned by the same parent entity. Upon the effectiveness of the merger UBS
Americas Inc succeeded to all the assets and liabilities of Credit Suisse (USA) LLC in
accordance with the terms of the merger agreement.
The Asset Transfer Agreement by which certain assets and liabilities of UBS AG were
transferred to UBS Switzerland AG is filed as Exhibit 4.1, and is described in Note 34 to
the Financial Statements (
Supplemental Guarantor Information
) on page 252 of the
Annual Report.
For detailed information regarding material agreements concluded in connection with
litigation, please refer to Exhibits 4.2 and 4.3, the Annual Report, Note 17 to the
Financial Statements (
Provisions and Contingent Liabilities
) (182-188), and to the UBS
AG Annual Report 2024, Note 18 (
Provisions and Contingent Liabilities
) (189-196).
These sections contain information about material agreements executed by the company
or its subsidiaries during litigation matters in the 2025 and 2024 financial years,
respectively, which fall outside the usual business activities.
D—Exchange Controls.
Other than in relation to economic sanctions, there are no restrictions under the Articles
of Association of UBS AG, nor under Swiss law, as presently in force, that limit the right
of non-resident or foreign owners to hold UBS’s securities freely. There are currently no
Swiss foreign exchange controls or other Swiss laws restricting the import or export of
capital by UBS or its subsidiaries, nor restrictions affecting the remittance of dividends,
interest or other payments to non-resident holders of UBS securities. The Swiss federal
government may impose sanctions on particular countries, regimes, organizations or
persons which may create restrictions on exchange of control. A current list, in German,
French and Italian, of such sanctions can be found at www.seco-admin.ch. UBS may also
be subject to sanctions regulations from other jurisdictions where it operates imposing
further restrictions.
E—Taxation.
UBS AG has no shareholders other than UBS Group AG, which is a Swiss company.
F—Dividends and Paying
Agents.
Not applicable.
G—Statement by Experts.
Not applicable.
H—Documents on Display.
UBS files periodic reports and other information with the Securities and Exchange
Commission. You may read and copy any document that we file with the SEC on the
SEC’s website,
www.sec.gov
. Much of this information may also be found on the UBS
website at
www.ubs.com/investors
.
I—Subsidiary Information.
Not applicable.
J—Annual Report to Security
Holders
Not applicable
Item 11
. Quantitative and Qualitative Disclosures About Market Risk.
(a) Quantitative Information
About Market Risk.
Annual Report,
Market risk
(73-80),
Total loss-absorbing capacity
(91-94) and
Currency
Management
(106).
(b) Qualitative Information
About Market Risk.
Annual Report,
Market risk
(73-80),
Total loss-absorbing capacity
(91-94) and
Currency
Management
(106).
(c) Interim Periods.
Not applicable.
Item 12.
A
– Debt Securities
Not applicable.
B – Warrants and Rights
Not applicable.
C – Other Securities
Not applicable.
Annual Report 2025
D – American Depositary Shares
Not applicable.
Item 13
. Defaults, Dividend
Arrearages and Delinquencies.
There has been no material default in respect of any indebtedness of UBS or any of its
significant subsidiaries or any arrearages of dividends or any other material delinquency
not cured within 30 days relating to any preferred stock of UBS AG or any of its
significant subsidiaries.
Item 14.
to the Rights of Security Holders
and Use of Proceeds.
None.
Item 15.
(a)
Disclosure Controls and
Procedures
Annual Report,
US disclosure requirements
(131), and
Exhibit 12 to this Form 20-
F.
(b) Management’s Annual
Report on Internal Control over
Financial Reporting
Annual Report,
Management’s report on internal control over financial reporting
(c) Attestation Report of the
Registered Public Accounting
Firm
Not applicable.
(d) Changes in Internal Control
over Financial Reporting
None.
Item 16A.
Audit Committee
Financial Expert.
Not required under the reduced disclosure format.
Item 16B.
Code of Ethics.
Not required under the reduced disclosure format.
Item 16C.
Principal Accountant
Fees and Services.
Annual Report,
Auditors
None of the non-audit services so disclosed were approved by the Audit Committee
pursuant to paragraph (c) (7)(i)(C) of Rule 2-01 of Regulation S-X.
Item 16D.
Listing Standards for Audit
Committees.
Not applicable.
Item 16E.
Purchases of Equity
Securities by the Issuer and
Affiliated Purchasers.
UBS AG does not have any class of equity securities registered pursuant to Section 12 of
the Exchange Act.
Item 16F.
Changes in
Registrant’s Certifying
Accountant.
Not applicable.
Item 16G.
Corporate
Governance.
UBS AG has debt securities listed on the New York Stock Exchange (NYSE), and
therefore discloses below the key differences from its corporate governance practices to
the NYSE standards relevant to US-listed companies.
Responsibility of the Audit Committee regarding independent auditors
Our Audit Committee is responsible for the compensation, retention and oversight of
independent auditors. It assesses the performance and qualifications of external auditors
and submits proposals for appointment, reappointment or removal of independent
auditors to the BoD. As required by the Swiss Code of Obligations, the BoD submits its
proposals for a shareholder vote at the annual general meeting (AGM). Under NYSE
standards audit committees are responsible for appointing independent auditors.
Discussion of risk assessment and risk management policies by the Risk Committee
As per the Organization Regulations of UBS AG, the Risk Committee, instead of the
Audit Committee, as per NYSE standards, oversees our risk principles and risk capacity
on behalf of the BoD. The Risk Committee is responsible for monitoring our adherence
to those risk principles and monitoring whether business divisions and control units
maintain appropriate systems of risk management and control.
Supervision of the internal audit function
Although under NYSE standards only audit committees supervise internal audit
functions, the Chairman of the BoD (the Chairman) and the Audit Committee share the
supervisory responsibility and authority with respect to the internal audit function.
Responsibility of the Compensation Committee for performance evaluations of senior
management of UBS Group AG
In line with Swiss law, UBS Group AG’s Compensation Committee, together with its
BoD, proposes for shareholder approval at the UBS Group AG AGM the maximum
aggregate amount of compensation for the BoD, the maximum aggregate amount of fixed
compensation for the Group Executive Board (the GEB) and the aggregate amount of
Annual Report 2025
variable compensation for the GEB. As UBS AG’s BoD members are the same as the
UBS Group AG BoD members, this approval by group shareholders is also applicable for
UBS AG. The members of the Compensation Committee are elected by the AGM. Under
NYSE standards it is the responsibility of compensation committees to evaluate senior
management’s performance and to determine and approve, as a committee or together
with the other independent directors, the compensation thereof.
Proxy statement reports of the Audit Committee and the Compensation Committee
NYSE standards require the aforementioned committees to submit their reports directly to
shareholders. However, under Swiss law all reports to shareholders, including those from
the aforementioned committees, are provided to and approved by the BoD, which has
ultimate responsibility to the shareholders.
Shareholder votes on equity compensation plans
NYSE standards require shareholder approval for establishing equity compensation plans
and material revisions thereto. However, as per Swiss law, the BoD approves
compensation plans. Shareholder approval is only mandatory if equity-based
compensation plans require an increase in capital. No shareholder approval is required if
shares for such plans are purchased in the market.
Independence of board members
NYSE standards require a majority of the members of the board of directors of a listed
company to be independent, which includes the requirement not to have been an
employee of the company within the last three years. In contrast, FINMA Circular 2017/1
“Corporate Governance – Banks” requires at least one third of the BoD members to be
independent, which includes the requirement not to have been employed in any other
function within the Group in the two years prior to taking office. Swiss rules also do not
require us to publish the criteria for determining the independence of board members on
our website.
Independence requirements of committee members
NYSE standards require the Audit Committee and the Compensation Committee to be
composed entirely of independent members. However, under Swiss law and regulations
only the majority of the Audit Committee members need to be independent, and there is
no independence requirement for the members of the Compensation Committee.
Item 16H.
Mine Safety
Disclosure.
Not applicable.
Item 16I.
Disclosure Regarding
Foreign Jurisdictions that
Prevent Inspections
Not applicable.
Item 16J.
Insider trading
policies
UBS has
dispositions of its securities by its employees and senior management, implementing
procedures designed to promote compliance with relevant insider trading rules and
regulations:
UBS Group Global Policy on Personal Investment
,
UBS Group Pre-
Clearance and Disclosure Requirements for Group Senior Management
, and
UBS Group
Dealing in UBS Shares and UBS Long Term Debt Securities by UBS
. These are filed as
Exhibits 11.1, 11.2 and 11.3 hereto.
Item 16K.
Cybersecurity.
Annual Report,
Operational risks affect our business
Risk management and
control
Board of Directors
Cybersecurity governance
Executive Board
Item 17.
Financial Statements.
Not applicable.
Item 18.
Annual Report,
Financial statements
(132-248), and
Additional regulatory information
(249-257).
Item 19.
Exhibits
Supplement (14).
Annual Report 2025
Supplemental information
Disclosure Pursuant To Section 219 of the Iran Threat Reduction And Syrian Human Rights Act
Section 219 of the US Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRA”) added Section 13(r) to the US
Securities Exchange Act of 1934, as amended (the “Exchange Act”) requiring each SEC reporting issuer to disclose in its
annual and, if applicable, quarterly reports whether it or any of its affiliates have knowingly engaged in certain activities,
transactions or dealings relating to Iran or with the Government of Iran or certain designated natural persons or entities
involved in terrorism or the proliferation of weapons of mass destruction during the period covered by the report. The required
disclosure may include reporting of activities not prohibited by US or other law, even if conducted outside the US by non-US
affiliates in compliance with local law. Pursuant to Section 13(r) of the Exchange Act, we note the following for the period
covered by this annual report:
UBS has a Group Sanctions Policy that prohibits transactions involving sanctioned countries, including Iran, and sanctioned
individuals and entities. However, UBS Switzerland AG maintains one account involving the Iranian government under the
auspices of the United Nations in Geneva after agreeing with the Swiss government that it would do so only under certain
conditions. These conditions include that payments involving the account must: (1) be made within Switzerland; (2) be
consistent with paying rent, salaries, telephone and other expenses necessary for its operations in Geneva; and (3) not involve
any Specially Designated Nationals (SDNs) blocked or otherwise restricted under US or Swiss law. In 2025, the gross
revenues for this UN-related account were approximately USD 75,383 (CHF 59,773). We do not allocate expenses to specific
client accounts in a way that enables us to calculate net profits with respect to any individual account. UBS Switzerland AG
intends to continue maintaining this account pursuant to the conditions it has established with the Swiss Government and
consistent with its Group Sanctions Policy.
In connection with former and now-closed trade finance arrangements, UBS Switzerland AG has maintained one existing
account relationship with an Iranian bank. This account was established prior to the US designation of this bank and
maintained due to the existing trade finance arrangements. In 2007, following the designation of the bank pursuant to sanctions
issued by the US, UN and Switzerland, the account was blocked under Swiss law and remained subject to blocking
requirements until January 2016. The blocking requirements under the Swiss law were re-introduced in October 2025
following the re-imposition of UN sanctions. Client assets as of 31 December 2025 were CHF 3,097.40. Gross revenues were
USD 16 equivalent (CHF 13).
In addition to the above, UBS Switzerland AG processed a small number of de minimis payments related to the operation of
Iranian diplomatic missions in Switzerland and related to fees for ministerial government functions such as issuing passports
and visas.
Annual Report 2025
Item 10. Additional Information.
B—Memorandum and Articles of Association.
Please see the Articles of Association of UBS AG (Exhibit 1.1 to this Form 20-F) and the Organization Regulations of UBS
AG (Exhibit 1.2 to this Form 20-F).
Set forth below is a summary of material provisions of the Articles of Association of UBS AG (the “Articles”), Organization
Regulations of UBS AG (the “Organization Regulations”) and relevant Swiss laws, in particular the Swiss Code of
Obligations, relating to the ordinary shares of UBS AG (the “shares”). This description does not purport to be complete and is
qualified in its entirety by references to Swiss law, including Swiss company law, and to the Articles and Organization
Regulations.
The principal legislation under which UBS AG operates, and under which the shares are issued, is the Swiss Code of
Obligations.
The Company
Registration and Business Purpose
UBS AG was incorporated and registered as a corporation limited by shares (
Aktiengesellschaft
) under the laws of Switzerland.
It is entered into the commercial registers of Canton Zurich and Canton Basel-City on February 28, 1978 under the registration
number CHE-101.329.561 and has registered domiciles in Zurich and Basel, Switzerland. The business purpose of UBS AG,
as set forth in article 2 of the Articles, is the operation of a bank, with a scope of operations extending to all types of banking,
financial, advisory, trading and service activities in Switzerland and abroad.
UBS AG may establish branches and
representative offices as well as banks, finance companies and other enterprises of any kind in Switzerland and abroad, hold
equity interests in these companies, and conduct their management. UBS AG is authorized to acquire, mortgage and sell real
estate and building rights in Switzerland and abroad. UBS AG may borrow and invest money on the capital markets. UBS AG
is part of the group of companies controlled by the group parent company UBS Group AG. It may promote the interests of the
group parent company or other group companies. It may provide loans, guarantees and other kinds of financing and security
for group companies. UBS AG is a wholly owned subsidiary of UBS Group AG.
Repurchase of Shares
Swiss law limits a corporation’s ability to hold or repurchase its own shares. UBS AG and its subsidiaries may repurchase
shares only if and to the extent that (i) UBS AG has freely distributable reserves in the amount of the purchase price and (ii)
the aggregate nominal value of all shares held by UBS AG and its subsidiaries does not exceed 10% of UBS AG nominal share
capital (or 20% of UBS AG nominal share capital in specific circumstances). Repurchases for cancellation purposes approved
by the shareholders’ meeting are not subject to the 10% threshold for own shares within the meaning of article 659 paragraph 2
of the Swiss Code of Obligations. UBS AG must record repurchased shares in its standalone financial statements prepared in
accordance with Swiss law as a negative equity item in an amount equal to the purchase price of each repurchased share.
Furthermore, in UBS AG’s consolidated financial statements, own shares are recorded at cost and reported as treasury shares,
resulting in a reduction in total shareholders’ equity. All shares of UBS AG are currently held by UBS Group AG.
Sinking Fund Provisions
There are no provisions in Swiss law or in the Articles requiring us to put resources aside for the exclusive purpose of
redeeming bonds or repurchasing shares.
Duration and Liquidation
UBS AG has an unlimited duration.
Under Swiss law, we may be dissolved at any time by way of liquidation or in the case of a merger in accordance with the
Swiss Federal Act on Merger, Demerger, Transformation of Assets of October 3, 2003, as amended, based on a resolution
passed at a shareholders’ meeting with the approval of at least two-thirds of the votes, and a majority of the aggregate nominal
value of shares, in each case represented at such meeting. As UBS AG is a Swiss bank, the Swiss Financial Market
Supervisory Authority FINMA is the only competent authority to open restructuring or liquidation (bankruptcy) proceedings
with respect to UBS AG.
Under Swiss law, any surplus arising out of a liquidation (after the settlement of all claims of all creditors) must be used first to
repay the nominal share capital of UBS AG. Thereafter, any balance must be distributed to shareholders in proportion to the
paid-up nominal value of shares held.
Independent Auditors
, Aeschengraben 27, 4051
, PCAOB number
, have been appointed as statutory
auditors and as auditors of the consolidated accounts of UBS AG. The auditors are subject to election each year by the
shareholders at the annual general meeting.
Annual Report 2025
Board of Directors
Conflicts of Interests
Swiss law requires directors and members of senior management to inform the Board of Directors (the “BoD”) immediately
and comprehensively of any conflicts of interest affecting them. The BoD then has to take the measures required to safeguard
the interests of the corporation. Directors and officers are personally liable to the corporation for any breach of these
provisions. In addition, Swiss law contains a provision under which payments made to a shareholder, a director, a person
involved in the corporation's management activities and a member of the advisory board or any person associated therewith,
other than at arm’s length, must be repaid to the corporation if they were unduly taken.
In addition, the Organization Regulations provide that the member of the BoD or senior management with a conflict of interest
may participate in discussions but shall abstain from voting on the relevant matter. If the chairperson concludes that the
conflict situation requires stricter measures, the chairperson may additionally exclude the conflicted member from any
discussions on the relevant matter or exclude the conflicted member from any discussions and information on the relevant
matter.
Borrowing Power
Neither Swiss law nor the Articles restrict in any way our power to borrow and raise funds, provided that any such borrowing
is entered into on arms’ length terms.
Listed companies, such as UBS Group AG, may grant loans to members of their BoD based on their articles of association.
UBS Group AG’s articles of association restrict its ability to grant loans to members of its BoD as follows: First, loans to the
independent members of the BoD shall be made in accordance with the customary business and market conditions. Second,
loans to the non-independent members of the BoD shall be made in the ordinary course of business on substantially the same
terms as those granted to UBS employees. Third, the total amount of such loans shall not exceed CHF 20m per member. As all
the members of UBS AG’s BoD are part of UBS Group AG’s BoD, these restrictions are enforced with respect to the UBS
AG’s BoD members even though this provision of Swiss law is not applicable to UBS AG.
BoD Compensation
The BoD is ultimately responsible for approving the compensation strategy and principles proposed by the Compensation
Committee, which determines compensation-related matters in line with the principles set forth in the Articles. As determined
in the Articles and the Organization Regulations, the Compensation Committee supports the BoD with its duties to set
guidelines on compensation and benefits, to oversee implementation thereof, to approve certain compensation and to scrutinize
executive performance. The Compensation Committee’s responsibilities and authorities include (among other things):
●
to propose the remuneration / fee framework for BoD members for approval by the BoD;
●
to approve the total compensation for the Chairman and the non-independent BoD members;
All the members of the BoD and Executive Board of UBS AG are part of the UBS Group AG BoD and Group Executive
Board, respectively, and Compensation Committee membership is the same. For UBS Group AG, the Compensation
Committee’s responsibilities include to propose to the Group BoD, for approval by the general meeting of the shareholders, the
maximum aggregate amount of compensation for the BoD and of fixed compensation for the GEB, and the aggregate amount
of variable compensation for the GEB. In addition, under Swiss law, the maximum aggregate compensation for the BoD and
for the Executive Board of a company with listed shares such as UBS Group AG must be approved by the shareholders.
For the Chairman and Vice Chairman, fees are paid 50% in cash and 50% in UBS Group AG shares, which are blocked for
four years. Other members of the UBS Group AG BoD receive at minimum 50% of their fees in UBS Group AG shares, which
are blocked for four years, and they may elect to receive up to 100% of their fees in blocked UBS Group AG shares. The
number of shares is calculated based on the average closing price of the 10 trading days leading up to and including the grant
date.
Retirement of Board Members
There is no age-limit requirement for retirement of the members of the BoD. The term of office for each BoD member is until
the next annual general meeting of shareholders, and no BoD member may serve for more than 10 consecutive terms of office.
In exceptional circumstances the BoD can extend this limit.
Shares and Shareholders
Shares
The shares are registered shares
(Namenaktien)
securities (
einfache Wertrechte
) (in the sense of the Swiss Code of Obligations) and, in the case of shares registered in the
Corporation’s Swiss register, constitute intermediated securities (
Bucheffekten
) (in the sense of the Swiss Federal
Intermediated Securities Act). The shares are fully paid up, and there is no liability of shareholders to further capital calls by
UBS AG. The shares rank
pari passu
the liquidation proceeds in case of the liquidation of UBS AG, preemptive rights in the event of a share issue (
Bezugsrechte
)
and advance subscription rights in the event of the issuance of equity-linked securities (
Vorwegzeichnungsrechte
).
Annual Report 2025
Net Profits and Dividends
Swiss law requires that at least 5% of the annual net profits of UBS AG must be retained and booked as statutory retained
earnings for so long as these retained earnings, together with the statutory capital reserve, amount to no less than 20% of UBS
AG’s share capital registered in the commercial register. Any remaining net profit may be allocated by the shareholders
represented at the applicable shareholders’ meeting.
Under Swiss law, dividends may be paid by UBS AG only if, based on its audited standalone statements prepared in
accordance with Swiss law, UBS AG has sufficient distributable profits from the previous financial years or sufficient free
reserves to allow the distribution of a dividend. In either event, dividends may be proposed by the BoD and will only be paid
by the corporation after approval by the shareholders’ meeting. UBS AG’s statutory auditors must confirm that any dividend
proposal of the BoD is in accordance with Swiss law and the Articles.
Dividends are usually due and payable after the shareholders’ resolution relating to the allocation of profits has been passed.
Under Swiss law, the statute of limitations in respect of dividend payments is five years (dividends not paid would be allocated
to a special reserve of UBS AG).
Share Register
Swiss law and the Articles require UBS AG to keep a share register in which the name, address and nationality (or registered
office in the case of legal entities) of the owners of the shares are recorded. The main function of the share register is to register
shareholders entitled to vote (and assert or exercise other rights relating to voting rights) and participate in shareholders’
meetings. For such registration, shareholders must confirm that they have acquired UBS Group AG shares in their own name
and for their own account. If the shareholder refuses to make such declaration, the BoD may refuse to allow the shares to be
entered with voting rights.
In order to register shares in UBS AG’s share register, a shareholder must file a share registration form with the share register.
Failing such registration, a shareholder may not vote at or participate in shareholders’ meetings, but will be entitled to receive
dividends and other rights with financial value, such as preemptive rights in the event of a share issue (
Bezugsrechte
) and
advance subscription rights in the event of the issuance of equity-linked securities (
Vorwegzeichnungsrechte
), and its share of
liquidation proceeds. Shareholders registered in our share register may at any time request from us a confirmation of the shares
that they hold according to UBS AG’s share register.
Shareholders’ Meetings
A shareholders’ meeting is convened by the BoD or, if necessary, by the company’s statutory auditors upon notification of the
shareholders at least 20 days prior to such meeting. An invitation to any shareholders’ meeting will be sent to all registered
shareholders in a form that allows proof by text. The Articles do not require a minimum number of shareholders to be present
in order to hold a shareholders’ meeting.
Unless otherwise provided by Swiss law or the Articles (as indicated below), resolutions require the approval of a majority of
the votes represented, excluding blank and invalid ballots, at a shareholders’ meeting in order to be passed.
Under Swiss corporate law (or Swiss banking law, as the case may be), a resolution passed at a shareholders’ meeting with the
approval of at least a two-thirds of the votes, and a majority of the aggregate nominal value of shares, in each case represented
at such meeting is required in order to approve:
●
A change in the corporation’s stated purpose in its articles of association;
●
The consolidation of shares, unless the consent of all the shareholders concerned is required;
●
The restriction or exclusion of preemptive rights in the event of a share issue (
Bezugsrechte
);
●
The conversion of participation certificates into shares;
●
The introduction of shares with preferential voting rights;
●
Any restriction on the transferability of registered shares;
●
Any change in the currency of the share capital;
●
The introduction of a casting vote for the person chairing the shareholders’ meeting;
●
A provision of the articles of association on holding the shareholders’ meeting abroad;
●
The delisting of the equity securities of the corporation;
●
The creation of conditional capital, the introduction of a capital band or, in accordance with Swiss banking law, the
introduction of reserve capital;
●
An increase in share capital in consideration of contributions in kind, or by off-set of a claim, or involving the
granting of special privileges, or from the transformation of reserves into share capital;
●
A change of domicile of the corporation;
●
The introduction of an arbitration clause in the articles of association;
●
Dispensing with the designation of an independent voting representative for conducting a virtual shareholders’
meeting in the case of corporations whose shares are not listed on a stock exchange (e.g., UBS AG); or
●
Dissolution of the corporation.
Annual Report 2025
Under the Articles, a resolution passed at a shareholders’ meeting with the approval of at least two-thirds of the votes
represented at such meeting is required in order to approve:
●
A change to the provisions in the Articles regarding the number of members of the BoD;
●
Removal of one-quarter or more of the members of the BoD; or
●
The deletion or modification of the provision of the Articles establishing these supermajority requirements.
At shareholders’ meetings, a shareholder can be represented by a legal representative or under a written power of attorney by a
proxy who does not need to be a shareholder or, under a written or electronic power of attorney, by the independent proxy.
Preemptive and Advance Subscription Rights
Under Swiss law, any share issue, whether for cash or non-cash consideration or for no consideration, is subject to the prior
approval of the shareholders’ meeting. Existing shareholders of a Swiss corporation have certain preemptive rights in the event
of a share issue (
Bezugsrechte
) and advance subscription rights in the event of the issuance of equity-linked securities
(
Vorwegzeichnungsrechte
) to subscribe for the new shares or equity-linked securities, as the case may be, in proportion to the
nominal amount of shares held. However, the articles of association of the corporation or a resolution approved at a
shareholders’ meeting by at least two-thirds of the votes and a majority of the aggregate nominal value of the shares, in each
case represented at the meeting, may limit or exclude such preemptive or advance subscription rights in certain limited
circumstances.
Notices
Notices to shareholders may be validly given by publication in the Swiss Official Gazette of Commerce or in such other form
that allows proof by text. The BoD may designate further means of publication as well.
Annual Report 2025
Item 19. Exhibits.
Exhibit
number
Description
1.1
Articles of Association of UBS AG dated 23 April 2024
. (Incorporated by reference to Form 6-K of UBS AG filed
on May 13, 2024)
1.2
Organization Regulations of UBS AG dated 5 January 2026
.
2(b)
Instruments defining the rights of the holders of long-term debt issued by UBS Group AG and its subsidiaries.
We agree to furnish to the SEC upon request, copies of the instruments, including indentures, defining the rights of
the holders of our long-term debt and of our subsidiaries’ long-term debt.
2(d)
Description of securities registered under Section 12 or the Securities Exchange Act of 1934. (Incorporated by
reference to Exhibit 2(d) to UBS AG's Annual Report on Form 20-F for the fiscal year ended December 31, 2024)
4.1
Asset Transfer Agreement between UBS AG and UBS Switzerland AG dated 12 June 2015
.
(Incorporated by
reference to Form 6-K of UBS AG filed on June 17, 2015)
4.2
US v. Credit Suisse Service AG Plea Agreement dated May 5, 2025
.
4.3
US v. Credit Suisse Service AG Non-Prosecution Agreement dated May 5, 2025
.
11.1
UBS Group Global Policy on Personal Investment
.
11.2
UBS Group Pre-Clearance and Disclosure Requirements for Group Senior Management.
reference to Exhibit 11.2 to UBS AG's Annual Report on Form 20-F for the fiscal year ended December 31, 2024)
11.3
UBS Group Dealing in UBS Shares and UBS Long Term Debt Securities by UBS.
(Incorporated by reference to
Exhibit 11.3 to UBS AG's Annual Report on Form 20-F for the fiscal year ended December 31, 2024)
12
The certifications required by Rule 13(a)-14(a) (17 CFR 240.13a-14(a)).
13
The certifications required by Rule 13(a)-14(b) (17 CFR 240.13a-14(b)) and Section 1350 of Chapter 63 of Title
18 of the U.S. Code (18 U.S.C. 1350).
15
Consent of Ernst & Young Ltd. with respect to UBS AG.
17
Guaranteed securities
97
UBS Group U.S Listing Standards Clawback Policy.
(Incorporated by reference to Exhibit 97 to UBS's Annual
Report on Form 20-F for the fiscal year ended December 31, 2023)
101
Interactive Data Files (sections of the Annual Report formatted in inline XBRL (Extensible Business Reporting
Language)). Furnished electronically herewith.
Annual Report 2025
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused the undersigned to sign this annual report on its behalf.
UBS AG
_/s/ Sergio Ermotti _______________
Name: Sergio Ermotti
Title: President of the Executive Board
Name: Todd Tuckner
Title: Chief Financial Officer
Name: Steffen Henrich
Title: Controller
Date: March 9, 2026
Contents
2
Our key figures
1
Our business model and environment
4
Integration of Credit Suisse
6
Our businesses
13
Our environment
15
Regulation and supervision
19
Regulatory and legal developments
24
Risk factors
2
Financial and
operating performance
36
Accounting and financial reporting
37
UBS AG consolidated performance
44
Global Wealth Management
45
Personal & Corporate Banking
47
Asset Management
48
Investment Bank
50
Non-core and Legacy
50
Group Items
3
Risk, capital, liquidity and funding,
and balance sheet
53
Risk management and control
88
Capital management
97
Liquidity and funding management
101
Balance sheet and off-balance sheet
106
Currency management
4
Corporate governance
107
Corporate governance
5
Financial
statements
132
Consolidated financial statements
247
Comparison between UBS AG consolidated and
UBS Group AG consolidated
6
Additional
regulatory information
250
UBS AG consolidated supplemental disclosures
required under SEC regulations
A
Appendix
258
Alternative performance measures
262
Abbreviations frequently used in our financial reports
264
Information sources
265
Cautionary statement
Corporate information
UBS AG
Art. 620ff. of the Swiss Code of Obligations as an Aktiengesellschaft, a
corporation limited by shares. The addresses and telephone numbers of the
two registered offices of UBS AG are: Bahnhofstrasse 45, CH-8001 Zurich,
Switzerland, telephone +41-44-234 11 11; and Aeschenvorstadt 1, CH-4051
Basel, Switzerland, telephone +41-61-288 50 50. The corporate identification
number is CHE-101.329.561. UBS AG is a bank. The company was formed on
29 June 1998, when Union Bank of Switzerland (founded in 1862) and
Swiss Bank Corporation (founded in 1872) merged to form UBS AG.
Contacts
Switchboards
For all general inquiries
ubs.com/contact
Zurich +41-44-234-1111
London +44-207-567-8000
New York +1-212-821-3000
Hong Kong SAR +852-2971-8888
Singapore +65-6495-8000
Investor Relations
UBS’s Investor Relations team manages
relationships with institutional investors,
research analysts and credit rating agencies.
ubs.com/investors
Zurich +41-44-234-4100
New York +1-212-882-5734
Media Relations
UBS’s Media Relations team manages
relationships with global media and
journalists.
ubs.com/media
Zurich +41-44-234-8500
mediarelations@ubs.com
London +44-20-7567-4714
ubs-media-relations@ubs.com
New York +1-212-882-5858
mediarelations@ubs.com
Hong Kong SAR +852-2971-8200
sh-mediarelations-ap@ubs.com
Office of the Group Company Secretary
The Group Company Secretary handles
inquiries directed to the Chairman or to other
members of the Board of Directors.
UBS Group AG, Office of the
Group Company Secretary
P.O. Box, CH-8098 Zurich, Switzerland
sh-company-secretary@ubs.com
Zurich +41-44-235-6652
Shareholder Services
UBS’s Shareholder Services team, a unit
of the Group Company Secretary’s office,
manages relationships with shareholders
and the registration of UBS Group AG
registered shares.
UBS Group AG, Shareholder Services
P.O. Box, CH-8098 Zurich, Switzerland
sh-shareholder-services@ubs.com
Zurich +41-44-235-6652
US Transfer Agent
For global registered share-related
inquiries in the US.
Computershare Trust Company NA
P.O. Box 43006
Providence, RI, 02940-3006, USA
Shareholder online inquiries:
www.computershare.com/us/
investor-inquiries
Shareholder website:
computershare.com/investor
Calls from the US
+1-866-305-9566
Calls from outside the US
+1-781-575-2623
TDD for hearing impaired
+1-800-231-5469
TDD for foreign shareholders
+1-201-680-6610
Corporate calendar UBS AG
Information about future publication dates is available at
ubs.com/global/en/investor-relations/events/calendar.html
Imprint
Publisher: UBS AG, Zurich, Switzerland | ubs.com
Language: English
© UBS 2026. The key symbol and UBS are among the registered and
unregistered trademarks of UBS. All rights reserved.
Annual Report 2025
Our key figures
UBS AG consolidated key figures
As of or for the year ended
USD m, except where indicated
31.12.25
31.12.24
31.12.23
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Net profit / (loss) attributable to shareholders
Profitability and growth
1
Return on equity (%)
2
Return on tangible equity (%)
2
Return on common equity tier 1 capital (%)
2
Revenues over leverage ratio denominator, gross (%)
2
Cost / income ratio (%)
2
Net profit growth (%)
2
Resources
1
Total assets
Equity attributable to shareholders
Common equity tier 1 capital
3
Risk-weighted assets
3
Common equity tier 1 capital ratio (%)
3
Going concern capital ratio (%)
3
Total loss-absorbing capacity ratio (%)
3
Leverage ratio denominator
3
Common equity tier 1 leverage ratio (%)
3
Liquidity coverage ratio (%)
4
Net stable funding ratio (%)
Other
Invested assets (USD bn)
2,5
Personnel (full-time equivalents)
1 Refer to the “Targets, capital guidance and ambitions” section of the UBS Group Annual Report 2025, available under “Annual reporting” at ubs.com/investors, for more information about our performance
measurement. 2 Refer to “Alternative performance measures” in the appendix to this report for the relevant definition(s) and calculation method(s). Each alternative performance measure (APM) that qualifies as a
non-GAAP measure as defined by US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to this report. 3 Based on the Swiss systemically relevant
bank framework. Refer to the “Capital management” section of this report for more information. 4 The disclosed ratios represent averages for the fourth quarter of each year presented, which were calculated based
on an average of 64 data points in the fourth quarter of 2025, 64 data points in the fourth quarter of 2024 and 63 data points in the fourth quarter of 2023. Refer to the “Liquidity and funding management” section
of this report for more information. 5 Consists of invested assets for Global Wealth Management, Asset Management (including invested assets from associates) and Personal & Corporate Banking. Refer to “Note 30
Invested assets and net new money” in the “Consolidated financial statements” section of this report for more information.
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance, financial
position or cash flows other than a financial measure defined or specified in the applicable recognized accounting
standards or in other applicable regulations. We report a number of APMs in the discussion of the financial and operating
performance of UBS AG, our business divisions and Group Items. We use APMs to provide a more complete picture of
our operating performance and to reflect management’s view of the fundamental drivers of our business results. A
definition of each APM, the method used to calculate it and the information content are presented under “Alternative
performance measures” in the appendix to this report. Each APM that qualifies as a non-GAAP measure as defined by
US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to
this report.
›
Refer to “Alternative performance measures” in the appendix to this report for additional information
1
Annual Report 2025
Terms used in this report, unless the context requires otherwise
”UBS”, ”UBS Group”, “UBS Group AG consolidated”, “Group” and “the
Group”
UBS Group AG and its consolidated subsidiaries
“UBS AG”, “UBS AG consolidated“, “we”, “us” and “our”
UBS AG and its consolidated subsidiaries
“Credit Suisse AG”
Credit Suisse AG and its consolidated subsidiaries, before the merger
with UBS AG
“Credit Suisse Group” and “Credit Suisse”
Credit Suisse Group AG and its consolidated subsidiaries, before the
acquisition by UBS
“UBS Group AG”
UBS Group AG on a standalone basis
“Credit Suisse Group AG”
Credit Suisse Group AG on a standalone basis, before the merger with
UBS Group AG
“UBS AG standalone”
UBS AG on a standalone basis
“UBS Switzerland AG” and “UBS Switzerland AG standalone»
UBS Switzerland AG on a standalone basis
“UBS Europe SE” and “UBS Europe SE consolidated”
UBS Europe SE and its consolidated subsidiaries
”UBS Europe SE standalone”
UBS Europe SE on a standalone basis
“UBS Americas Holding LLC”
UBS Americas Holding LLC and its consolidated subsidiaries
“1m”
One million, i.e. 1,000,000
“1bn”
One billion, i.e. 1,000,000,000
“1trn”
One trillion, i.e. 1,000,000,000,000
In this report, unless the context requires otherwise, references to any gender shall apply to all genders.
Comparability
Profit and loss and other flow-based information for the years ended 31 December 2025 is based entirely on consolidated
data following the acquisition of the Credit Suisse Group. Comparative information for the year ended 31 December
2024 includes seven months of consolidated data following the merger of UBS AG and Credit Suisse AG (June to
December 2024) and five months of pre-merger UBS AG data only (January to May 2024). Comparative information for
the year ended 31 December 2023 includes pre-merger UBS AG data only.
Balance sheet information as at 31 December 2025 and as at 31 December 2024 includes post-merger consolidated
information. Balance sheet information as at 31 December 2023 reflects pre-merger UBS AG information only.
Annual Report 2025
Our business model and
environment
Management report
Integration of Credit Suisse
On 12 June 2023, UBS Group AG acquired Credit Suisse Group AG, succeeding by operation of Swiss law to all assets
and liabilities of Credit Suisse Group AG.
Since the acquisition, we have significantly simplified our legal entity structure across key jurisdictions, having merged
UBS AG and Credit Suisse AG in May 2024 and having completed the transition to a single US intermediate holding
company and the merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG in July 2024.
In 2025, we merged Credit Suisse Holdings (USA), Inc. with UBS Americas Inc, deregistered Credit Suisse Securities
(USA) LLC as a broker-dealer and established UBS Europe SE as the single EU intermediate parent undertaking. Moreover,
Credit Suisse International transferred substantially all of its residual business and the related products to UBS AG London
Branch and UBS Europe SE.
In the first quarter of 2025, we completed the consolidation of our branch network in Switzerland, having merged 95
branches with existing ones since the merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG.
Throughout 2025, we also continued to make excellent progress with respect to client account migrations and
infrastructure decommissioning. By the end of the fourth quarter of 2025, 85% of Swiss-booked accounts had been
migrated, including substantially all of the targeted Personal & Corporate Banking client accounts. We remain on track
to complete the migrations of the Swiss-booked client accounts by the end of the first quarter of 2026.
In March 2025, we completed the sale of Select Portfolio Servicing, the US mortgage servicing business of Credit Suisse,
which was managed in Non-core and Legacy. We recognized a loss of USD 11m upon the completion of the transaction,
and the completion reduced UBS AG’s RWA by around USD 1.3bn and UBS AG’s leverage ratio denominator by around
USD 1.7bn.
In October 2024, we entered into an agreement to sell to American Express Swiss Holdings GmbH (American Express)
our 50% interest in Swisscard AECS GmbH (Swisscard). At the same time, we entered into an agreement with Swisscard
to transition the Credit Suisse-branded card portfolios to UBS. The purchase of the card portfolios was completed in
January 2025. In January 2026, we completed the sale of our 50% interest in Swisscard to American Express, and we
expect to record a gain on sale in the first quarter of 2026. As previously disclosed, this gain is expected to largely offset
the effects related to the prior Swisscard transactions recorded in the first quarter of 2025 (an expense of USD 180m and
a gain of USD 64m) and the fourth quarter of 2024 (an expense of USD 41m).
›
Refer to “Note 28 Changes in organization and acquisitions and disposals of subsidiaries and businesses” in the “Consolidated
financial statements” section of this report for more information
We expect to substantially complete the integration of Credit Suisse by the end of 2026.
Remediation of Credit Suisse material weaknesses
In March 2023, prior to the acquisition by UBS Group AG, the Credit Suisse Group and Credit Suisse AG disclosed that
their management had identified material weaknesses in internal control over financial reporting as a result of which the
Credit Suisse Group and Credit Suisse AG had concluded that, as of 31 December 2022 and 2021, their internal control
over financial reporting was not effective. Following the acquisition and merger of Credit Suisse Group AG into UBS
Group AG in June 2023, Credit Suisse AG concluded that as of 31 December 2023 its internal control over financial
reporting continued to be ineffective.
Since the Credit Suisse acquisition, UBS has executed a remediation program to address the identified material
weaknesses and has implemented additional controls and procedures.
Annual Report 2025
As of 31 December 2024, management assessed that the changes to internal controls made to address the material
weaknesses relating to the classification and presentation of the consolidated statement of cash flows, as well as
assessment and communication of the severity of deficiencies, were designed and operating effectively. The remaining
material weakness related to the risk assessment of internal controls. During 2024, UBS integrated the Credit Suisse
control framework into the UBS internal control framework and risk assessment and evaluation processes. In addition,
UBS reviewed the processes, systems and internal controls in connection with the integration of Credit Suisse into UBS
and implemented additional processes and controls to reflect the increase in complexity of the accounting and financial
control environment following the acquisition. Management assessed that the risk assessment process was designed
effectively.
However, considering the increased complexity of the internal accounting and control environment, the remaining
migration efforts still underway and limited time to demonstrate operating effectiveness and sustainability of the post-
merger integrated control environment, management concluded that additional evidence of effective operation of the
remediated controls was required to conclude that the risk assessment processes were operating effectively on a
sustainable basis. In light of the above, management concluded that there was a material weakness in internal control
over financial reporting at 31 December 2024.
As of 31 December 2025, UBS AG management has assessed the effectiveness of UBS AG’s risk assessment process and
concluded that changes made to the risk assessment processes were designed and operating effectively, with significant
integration and migration steps completed. UBS AG management has therefore concluded that the risk assessment
material weakness has been remediated.
›
Refer to “Management’s report on internal control over financial reporting” in the “Consolidated financial statements” section of
this report for more information about management’s assessment of internal control over financial reporting as of 31 December
2025 and the remediation of Credit Suisse material weaknesses
Annual Report 2025 |
Our business model and environment | Our businesses 6
Our businesses
We operate through five business divisions: Global Wealth Management, Personal & Corporate Banking, Asset
Management, the Investment Bank and Non-core and Legacy. With significant presences in the largest and fastest-
growing markets, our global reach and the breadth and depth of our expertise are major assets that set us apart from
our competitors. We see collaboration, both within and between business divisions and regions, as key to delivering on
our growth objectives. Our Group functions are support and control functions that provide services to the Group. Virtually
all costs incurred by the Group functions are allocated to the business divisions, leaving a residual amount that we refer
to as Group Items in our segment reporting.
Global Wealth Management
We are the world’s only truly global wealth manager, dedicated to serving high and ultra high net worth individuals, as
well as select institutional clients, through trusted advisor and financial intermediary relationships. Our global reach
combined with local expertise, Chief Investment Office (CIO)-led investment approach, comprehensive solutions platform
and premium brand are key differentiators.
Global Wealth Management is jointly managed by two Co-Presidents and organized into five regional business units
covering the US, Latin America, Asia Pacific, EMEA and Switzerland, as well as capability business units, such as the CIO
and GWM Solutions, and support units. Altogether, these units help to efficiently deliver research and solutions, tied to
the CIO-led value proposition, to our clients – leveraging our global scale and local implementation.
For regional financial reporting purposes, we disclose selected information about the Americas, Asia Pacific, EMEA and
Switzerland regions, and Divisional items.
Our business
We help clients to protect and grow their investments and pursue what matters most to them through advice, expertise,
and tailored solutions.
We offer clients advice on wealth planning to sustainably increase their wealth over the long term through a broad range
of solutions, including discretionary or advisory mandates and investment funds where we have distribution agreements.
These solutions represent a subset of total invested assets of USD 4.8trn. The remaining invested assets represent advisory
assets or assets generating primarily transaction-based and interest income, mainly from trading, cash, deposits and
lending services. With discretionary mandates, clients delegate investment decisions to UBS and benefit from our full
investment capabilities, including portfolio management, instrument selection and access to leading external managers
across traditional, sustainable and alternative asset classes. With advisory mandates, clients make their own investment
decisions, supported by professional advice and portfolio monitoring guided by the
UBS House View
. Our investment
offering covers a broad range of instruments, including cash equities, cash bonds, money market instruments, investment
funds, structured products and alternative solutions that provide access to private markets, hedge funds and real estate
assets. We typically generate recurring net fee income, which is primarily linked to the value of the fee-generating assets.
This fee income includes portfolio management fees, asset-based fund fees, custody fees and administrative fees. We
also generate transaction-based income, which consists primarily of brokerage revenues, trading revenues, foreign
exchange fees and other charges linked to specific client transactions.
›
Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method of invested
assets, fee-generating assets, net new money and net new assets
›
Refer to “Note 30 Invested assets and net new money” in the “Consolidated financial statements” section of this report for more
information about invested assets and net new money
Beyond our investment solutions, we offer a comprehensive range of banking services, including lending and deposits.
Our lending offering includes securities-based lending, mortgages, structured products and tailored solutions designed
to meet more sophisticated borrowing needs of our clients – including select institutional clients – and their businesses.
As of 31 December 2025, our lending portfolio amounted to USD 329bn globally and generated revenues primarily
through net interest income. In terms of deposits, we provide clients with flexibility and convenient access to their funds.
These deposits, which also contribute to net interest income, totaled USD 479bn globally as of 31 December 2025. Our
broad-based investment and banking solutions help us attract net new money from new and existing clients. This,
combined with dividends and interest, drives net new assets.
Annual Report 2025 |
Our business model and environment | Our businesses 7
Our CIO-led value proposition is designed to identify investment opportunities to protect and grow our clients’ wealth
over the long term, forming the basis of the
UBS House View
. The CIO gathers insights on financial planning,
macroeconomics, multi-asset strategies, stocks, bonds, currencies and commodities, as well as structured, sustainable,
and alternative investments. GWM Solutions brings all UBS products under one umbrella and efficiently and consistently
implements the CIO’s guidance, delivering integrated solutions that put the
UBS House View
We continue to invest in our platforms to enhance the client experience and deliver the full value of our CIO-led approach.
Clients can access research and solutions directly through our digital banking channels, where the
Direct Investment
Insights
discretionary solution,
UBS My Way
to tailor portfolios to their individual preferences and objectives. For those seeking professional guidance while remaining
actively involved in decision-making,
UBS Advice Compass
portfolios in depth and identifying actionable opportunities aligned with the
UBS House View
.
We are embedding advanced artificial intelligence (AI) capabilities across our platforms. AI-powered tools, including
chatbots, intelligent search features and multi-media functionalities, are enhancing both client and advisor experiences
by making the investment insights delivery more efficient and personalized. In addition, we connect clients with cutting-
edge research, innovative solutions and exclusive access to experts in the AI space and beyond, helping them to stay on
top of the latest innovations shaping today’s industries.
Competition
Our main competitors fall into two categories: competitors with a strong position in the Americas but with more limited
global footprints, such as Morgan Stanley, JPMorgan Chase, Bank of America and Wells Fargo, as well as some smaller
firms, such as Raymond James; and competitors with international footprints but with a smaller presence than UBS in
the US, such as Julius Baer, BNP Paribas, Deutsche Bank and HSBC. We also compete with fintech firms in some regions
and products. We have strong positions across all key regions, including the largest wealth region (the US) and the fastest-
growing wealth regions (Asia Pacific, the Middle East and Latin America), as well as the more mature markets in Europe,
including Switzerland. The scale of our global franchise, our bespoke cross-divisional solutions and our premium brand
and reputation differentiate us from our competitors and would be difficult to replicate.
Annual Report 2025 |
Our business model and environment | Our businesses 8
Personal & Corporate Banking
Personal & Corporate Banking is at the core of our operations in Switzerland, the only market in which we operate across
all of our business areas, supporting our clients and the Swiss economy with UBS’s unparallelled global reach and
capabilities.
We are the leading universal bank in Switzerland, and we provide an extensive range of financial products and services to
private, corporate and institutional clients. We are a go-to bank for entrepreneurs in Switzerland, providing comprehensive
support at every stage of the entrepreneurial journey. With our network of around 190 branches and highly qualified client
advisors, complemented by modern digital banking services and customer service centers, we serve more than one-third of
Swiss households and more than 90% of large Swiss companies.
In 2025, UBS was again named Best Bank in Switzerland by
Euromoney
, for the eleventh time since 2012. Our role as a
trusted partner to the Swiss economy remains central to our strategy. This is underpinned by our pledge to remain a reliable
provider of credit to the Swiss economy through a lending volume commitment of around CHF 350bn.
Aligned with the UBS Group’s artificial intelligence (AI) strategy and ambition to become an AI-enabled institution, Personal
& Corporate Banking is embedding AI into its operations to drive innovation and enhance client experience. In addition,
Personal & Corporate Banking is actively shaping the UBS digital assets offering to meet the emerging needs of our clients.
For example, we are developing digital money offerings for corporate clients and exploring access to crypto assets for
individual clients.
Our business
Personal & Corporate Banking is composed of two business areas: Personal Banking and Corporate & Institutional Clients.
In Personal Banking, we provide clients with a comprehensive suite of life-cycle-oriented products and services. Financing
solutions, primarily mortgages, and deposits form the cornerstone of our offering. Additionally, we provide our clients
with access to investment products and pension solutions. Our clients also benefit from further services, such as payment
solutions, card transactions and foreign exchange operations.
In Corporate & Institutional Clients, we serve corporate and institutional clients with a comprehensive suite of solutions
backed by deep expertise. Our financing offering and deposit products are the central pillar of our offering. A second
pillar consists of services related to foreign exchange, payments and trade finance. A third pillar includes additional
services, such as asset custody and the provision of investment fund products.
On an aggregate Personal & Corporate Banking level, net interest income from our financing and deposit offerings is the
primary income contributor, accounting for more than half of total revenues. Transaction-based income generated
through payments, card transactions, trade finance and foreign exchange operations is the second-largest contributor,
making up approximately one quarter of total revenues. Additional revenues are mainly derived from recurring net fee
income linked to our investment products, pension solutions, asset custody services and basic banking offerings.
In Personal & Corporate Banking, we work in close collaboration with other business areas to provide our Swiss clients
seamless access to a broad range of capabilities and global reach. In collaboration with Global Wealth Management, we
deliver leading wealth management services tailored to clients’ individual needs. In partnership with the Investment Bank,
we offer capital market and foreign exchange products, hedging strategies, trading capabilities and corporate finance
advice. Additionally, through our cooperation with Asset Management, we provide comprehensive fund and portfolio
management solutions.
We support our clients in achieving their sustainability goals, as both corporate clients and individuals have been exploring
effective strategies for transitioning to a lower-carbon economy. For example, we have enhanced our Swiss real estate
services to further support clients with renovating and refurbishing their properties to achieve higher energy efficiency
standards. Furthermore, we have introduced CO
2
UBS
key4
portfolios. These innovations mark important steps in helping our clients improve the energy efficiency and long-term
value of their properties.
We consider a strong partner network as essential for UBS’s success in Switzerland, enabling us to serve both corporate
and individual clients holistically through bank-adjacent services. These partnerships not only foster deeper client
relationships, accelerate time to market and offer flexible integration options, but also unlock new market opportunities
and revenue streams.
Our partner network includes collaborations with platforms for start-ups, such as Fasoon, Startups.ch, and NewCo,
enabling us to actively support clients in taking their first entrepreneurial steps. Partnerships aimed at building stronger
relationships with our mortgage clients are another example. Our exclusive partnership with the SMG Swiss Marketplace
Group enables us to support potential property buyers in their journey toward owning a home through our integration
with Switzerland’s largest real estate portals, such as Homegate and Immoscout24.
Annual Report 2025 |
Our business model and environment | Our businesses 9
Competition
In Personal Banking, our main competitors are the Swiss cantonal banks, Raiffeisen, PostFinance and other regional and
local Swiss banks; we also face competition from international neobanks and other national digital market participants.
In the corporate and institutional business, the Swiss cantonal banks and foreign banks are our main competitors. We
also support the international business activities of our Swiss corporate clients through local hubs in New York, Frankfurt,
Singapore and the Hong Kong SAR, where we compete with other foreign banks that have global operations. No other
Swiss bank offers its corporate clients local banking capabilities abroad.
Asset Management
We are a global, large-scale and diversified asset manager offering investment capabilities and strategies to institutions,
wholesale intermediaries and Global Wealth Management clients. With total invested assets of over USD 2trn, we are
one of the leading Europe-based asset managers.
We are focused on meeting the evolving needs of our clients by capitalizing on the products and areas where we have a
differentiated and scalable offering and by enhancing our partnerships with the other business divisions across the Group.
In 2025, we have integrated the breadth of our direct public and private markets capabilities within our Investments area,
enabling us to leverage the best of our expertise and technology within a single platform.
Following this change, Asset Management is organized into four areas: Client Coverage; Investments, Unified Global
Alternatives; and the Chief Operating Officer area.
We cover the main asset management markets globally and have a local presence in 24 locations across four regions: the
Americas; Asia Pacific; EMEA; and Switzerland. We also continue to build on our long-standing presence in China, where
we have enhanced our onshore presence through the ICBC joint venture.
To support sustainable growth across our business, we are transforming our end-to-end platform and embedding artificial
intelligence across our investment, front-to-back and distribution processes to enhance scalability, efficiency and client
outcomes. We also remain focused on capturing structural efficiencies and further sharpening our product offering.
Our business
We are committed to delivering investment excellence and to creating value for our clients that endures through cycles.
We offer a range of investment products and services across all major traditional and alternative asset classes and investing
styles.
We have organized our direct investment capabilities across the following areas.
Active Equities
thematic strategies, as well as high alpha, growth and quantitative styles.
Active Fixed Income
currencies, as well as money market funds. In addition, our Credit Investments Group specializes in syndicated loans,
structured credit and upper-middle-market direct lending.
Active Multi-Asset
including balanced, growth, income, risk-managed and unconstrained strategies, as well as white label solutions.
Partnership Solutions
– we draw on our value chain across the Group to provide customized full-service fiduciary,
investments and proprietary technology solutions and also collaborate with other business divisions to serve the needs of
our clients. For example, our Separately Managed Accounts (SMA) Advantage initiative with Global Wealth Management
in the US continues to gain momentum and reached a record USD 231bn in invested assets at the end of 2025.
Passive
– we continue to build on our position as the largest Europe-based manager of indexed investments and our
expertise in customization. We offer a wide range of indexed strategies across asset classes, along with exchange-traded
funds (ETFs), pooled funds and segregated mandates. In 2025 we expanded our ETF offering with the launch of a new
cost-efficient
Core
range, as well as our first active ETFs, leveraging our active fixed-income capabilities.
Real Assets (including real estate and infrastructure)
– a comprehensive range of global and regional strategies, from core
to value-add and opportunistic.
To capture the growth opportunity in alternatives, and in a transformational move for our clients and our partners, in
2025 we brought together our leading manager selection franchises from across Asset Management and Global Wealth
Management to create our
Unified Global Alternatives (UGA)
business. UGA provides an open architecture platform
offering clients customized solutions across hedge funds, private equity, private credit, real estate, infrastructure and
multi-alternative investment products, as well as access to co-investments and secondary market opportunities for our
more sophisticated clients. With a combined USD 330bn in invested assets, UGA is one of the leading limited partners
globally.
Annual Report 2025 |
Our business model and environment | Our businesses 10
We support our clients’ sustainability objectives with a wide range of products and solutions incorporating a variety of
approaches, including impact- and transition-focused strategies.
We charge management fees on our funds and mandates (as a percentage of invested assets) and, to a lesser extent,
performance fees on our active investment capabilities. Our revenues therefore depend on both total invested assets and
the mix between higher fee strategies, such as active mandates, and lower fee passive strategies.
Competition
Our main competitors are global firms with wide-ranging capabilities and distribution channels, such as 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, as well as firms with
a specific market or asset-class focus.
Investment Bank
The Investment Bank provides services to institutional, corporate, financial sponsor and Global Wealth Management
clients, helping them raise capital, invest and manage risks, while targeting attractive and sustainable risk-adjusted returns
for the Group’s shareholders. Our traditional strengths are in equities, foreign exchange, precious metals, research,
advisory and capital markets, complemented by a focused rates and credit platform. We use our data-driven research
and technology capabilities to help clients adapt to evolving market structures and changes in regulatory, technological,
economic and competitive landscapes.
We aim to deliver market-leading solutions by leveraging our intellectual capital and digital platforms, we work closely
with Global Wealth Management, Personal & Corporate Banking and Asset Management to bring the best of the Group’s
capabilities to our clients. We do so while being disciplined about risk, balance sheet deployment and costs.
Our business is regionally diversified, with a presence in more than 30 countries. We cover the main investment banking
markets globally and have major financial hubs across four regions: the Americas; Asia Pacific; EMEA; and Switzerland.
Our business
The Investment Bank is composed of two business areas, Global Banking and Global Markets, both supported by Global
Research. Our global coverage model utilizes our international industry expertise and product capabilities to meet clients’
emerging needs.
Our Global Banking business area, which consists of Advisory and Global Capital Markets, offers a broad range of
investment banking products and services to our clients. Global Banking advises clients on strategic business
opportunities, such as mergers, acquisitions and related strategic matters, and helps them raise capital, in both public
and private markets, to fund their activities. We position ourselves as trusted advisors via our client coverage and ability
to provide access to the wider suite of UBS’s capabilities. With teams located across the Americas, Asia Pacific, EMEA and
Switzerland regions, our banking coverage offers clients local market expertise coupled with access to a global network.
Global Banking primarily generates fee-based revenues from advisory, origination, deal execution, financing and
underwriting services provided to clients.
Our Global Markets business helps clients engage with international financial markets, providing fast, innovative and
bespoke access to solutions, from market and insight tools to trade strategies and execution. Our capabilities are grouped
into three product verticals: Execution Services, Derivatives & Solutions and Financing. Global Markets enables clients to
buy, sell and finance securities on capital markets worldwide and to manage their risks and liquidity. We distribute, trade,
finance and clear cash equities and equity-linked products, as well as structuring, originating and distributing new equity
and equity-linked issues. From origination and distribution to managing risk and providing liquidity in foreign exchange,
rates, credit and precious metals, we help clients to realize their financial goals. We generate revenue from fees for
trading services (e.g. execution, market making, clearing and providing liquidity) and interest on investment financing.
Our Global Research business delivers data-driven insights to clients across major financial markets and securities
worldwide. With analysts based in more than 20 countries and coverage of over 3,800 stocks in 52 markets, we continue
to strengthen our research capabilities. Our offering includes fundamental coverage across equities, economics and
strategy, as well as market-leading data insights from Quant Research, Evidence Lab and HOLT, which are cornerstones
of the UBS Investment Bank’s data intelligence offering. UBS HOLT maintains a database of over 20,000 company profiles
around the world, providing clients with seamless benchmarking, screening and scoring of companies, eliminating the
need to sift through extensive global accounting data.
The Investment Bank also offers an array of sustainability-focused advice, products, research and events. We help meet
clients’ needs with respect to environmental, social and governance considerations and sustainable finance, helping to
reshape business models and investment opportunities and to develop sustainable finance products and solutions. As
sustainability priorities and other secular themes, such as AI, continue to shape investor preferences, corporate strategy
and actions, we aim to deliver integrated advice that connects these evolving trends to equity stories, financing and
investor engagement.
Annual Report 2025 |
Our business model and environment | Our businesses 11
Our global reach presents a catalyst for continued and future profitable growth. In the Americas, the largest investment
banking fee pool globally, we continue to focus on increasing market share in our core Global Banking and Global
Markets businesses. In Asia Pacific, we plan to capture opportunities arising from expected market internationalization
and growth in China and other markets and to strengthen our presence in the region. In EMEA and Switzerland, we plan
to leverage our strong base and brand recognition to further gain market share.
Our priority is providing high-quality execution and seamless client service, through an integrated, solutions-led approach,
with disciplined growth in the advisory and execution businesses, while accelerating our digital transformation. We seek
to develop new products and solutions consistent with our capital-efficient business model, typically related to new
technologies or changing market standards.
The Investment Bank strives to be the digital investment bank of the future, focused on delivering innovation-led solutions
and efficiencies for our clients. Our digital strategy harnesses technology to provide access to sources of unique, global
liquidity, personalized advice and differentiated content.
Our ambition to be the most client-focused, efficient and data-driven investment bank is being realized through the
simplification of technology architecture, increased speed and quality of delivery and the attraction of best-in-class talent.
As we look forward to the continued evolution of our digital capabilities, we will see increased adoption of technologies,
such as generative AI, to scale efficiency and provide actionable insights into client portfolios.
Our capabilities, core products and services enable us to deliver our strategy to an expanded institutional and corporate
client base. In addition, we are well positioned to serve Global Wealth Management, offering investment banking
capabilities, and to further enhance our connections with wealth management clients. Joint efforts between the
Investment Bank and the other business divisions (for example, our work with Global Wealth Management through GWM
Solutions coverage) and, externally, strategic partnerships (for example, UBS BB jointly with Banco do Brasil, focused on
Latin America) continue to be key strategic priorities. Partnerships with Global Wealth Management and Asset
Management enable us to provide clients with broad access to financing, global capital markets and portfolio solutions.
We expect these initiatives to continue to lead to growth by delivering global products to each region, leveraging our
global connectivity across borders and sharing and strengthening our best client relationships.
Competition
Competing firms operate in many of our markets, but our strategy differentiates us, with our focus on selective leadership
in the areas where we have chosen to compete and a business model that leverages talent and technology rather than
balance sheet. Our main competitors are major global investment banks, including Morgan Stanley, Goldman Sachs,
Bank of America, Barclays, Citigroup, BNP Paribas, Deutsche Bank, Wells Fargo and JPMorgan Chase. In certain products
and regions, we also compete with boutique investment banks and fintech firms.
Non-core and Legacy
The Non-core and Legacy division was formed at the end of the second quarter of 2023 to incorporate selected assets
and liabilities originating from the former Credit Suisse businesses not aligned with our long-term strategic priorities or
risk appetite, including associated financial and non-financial assets, operating expenses, and funding costs. A small part
of the division was made up of positions from UBS’s former Non-core and Legacy Portfolio and some other legacy UBS
assets and liabilities that were assessed as non-strategic in the context of the acquisition of the Credit Suisse Group.
With the aim of exiting its positions over time, the division’s portfolio included the following businesses from the former
Credit Suisse Investment Bank:
–
loans primarily related to corporate clients and emerging markets;
–
the residual securitized products businesses;
–
the macro trading business, including rates and foreign exchange;
–
the legacy life-finance business;
–
the equities portfolio, including the remaining equity swaps, share back-lending positions and legacy structured
renewables-linked positions; and
–
the residual credit business.
Since its inception, Non-core and Legacy has made strong progress in actively reducing its portfolio. In the final year of
integration, we aim to continue to reduce Non-core and Legacy’s operating costs, with a focus on infrastructure
simplification. We also expect to continue to wind down some remaining positions to achieve further reductions in
financial resource consumption. Incremental costs or losses may arise in connection with the reduction of such assets and
liabilities.
Annual Report 2025 |
Our business model and environment | Our businesses 12
Group functions
Our Group functions are support and control functions that provide services to the Group, focusing on operational
effectiveness, risk mitigation and efficiency. The major areas of these functions are Group Services and Group Treasury.
Group Services consists of Group Technology, Group Compliance and Operational Risk Control, Group Finance, Group
Risk Control, Group Human Resources and Corporate Services, Group Corporate Communications and Group Brand &
Marketing, Group Legal, the Group Integration Office, Group Sustainability and Impact, and the Chief Strategy Office.
The vast majority of these support and control functions are fully aligned with, or deliver shared services to, the business
divisions.
Group Treasury manages balance sheet structural risk (e.g. interest rate, structural foreign exchange and collateral risks),
as well as the risks associated with our liquidity, capital and funding portfolios. Group Treasury serves all five business
divisions, and its risk management is integrated into the Group risk governance framework.
Virtually all costs incurred by the Group functions are allocated to the business divisions, leaving a residual amount that
we refer to as Group Items in our segment reporting in accordance with IFRS Accounting Standards. These include costs
or revenues related to certain activities that are retained centrally, such as group hedging and own debt activities in Group
Treasury, as they are not directly related to the business divisions, as well as certain other costs that are mainly related to
deferred tax assets.
Most of the employees in the Group functions are employed by UBS Business Solutions AG. The costs of the Group
functions employees in UBS Business Solutions AG are reflected as compensation expense in UBS Group reporting and
as general and administrative expense in UBS AG reporting.
Annual Report 2025 |
Our business model and environment | Our environment 13
Our environment
Market environment
Global economic developments in 2025
1
The global economy remained resilient in 2025, with growth accelerating to 3.5% from 3.4% in 2024, supported by
heavy investment in artificial intelligence (AI) and healthy demand from consumers across many of the world’s regions
and markets. Worries raised early in the year over the potential for a global trade conflict faded as the US and key trading
partners agreed deals.
US gross domestic product (GDP) grew by 2.2%, moderating after above average growth in 2023 and 2024. Capital
spending on AI accounted for about half of US growth for the year. US consumer spending continued to rise, backed by
increasing real incomes, and in spite of signs of weakness in the labor market.
China’s GDP grew by 5.0%, in line with the 5.0% growth recorded in 2024. This was despite weakness in the property
market and consumer demand. New economic drivers, including investment in AI, advanced manufacturing and
renewables, gained momentum.
The Eurozone’s GDP growth picked up from 0.9% in 2024 to 1.5% in 2025, as the region benefited from an easing of
monetary policy, the improving health of the banking system and rising demand for goods. Swiss GDP grew by 1.2%,
slightly less than 1.4% recorded in 2024. While consumer spending was solid and the Swiss National Bank (the SNB) cut
interest rates to zero, worries over trade relations with the US weighed on business confidence throughout most of the
year, until a trade deal was agreed in November 2025.
Inflation across most major economies continued to normalize. Consumer prices globally increased by 3.3% in 2025,
compared with 5.7% in 2024. The ebbing of inflationary pressure enabled many large central banks to cut interest rates
further. The European Central Bank (the ECB) lowered its deposit rate to 2.0%, down from 3.0% at the start of the year,
as inflation for the Eurozone moved closer to its 2% target. US inflation remained above the Federal Reserve’s 2% target,
averaging 2.7% for the year. But slowing inflation (down from 3.0% in 2024) and a cooling labor market led the Federal
Reserve to reduce interest rates in each of its last three policy meetings in 2025.
Amid interest rate cuts and solid economic growth, most major asset classes delivered strong gains in 2025 across regions.
Global stocks (the MSCI All Country World index) delivered a third straight year of gains in excess of 20%. In the US,
enthusiasm over the outlook for AI contributed to broader gains, with the S&P 500 index delivering a total return of
17.9%, while the equal-weighted S&P 500 index, which dilutes the impact of large technology stocks, gained 11.4%. In
the Eurozone, the MSCI EMU index of stocks returned 24.7%, helped by expectations of a boost to demand after the
German government approved a fiscal expansion. In Asia Pacific, the MSCI China index gained 30.7% and the MSCI
Japan index 24.7%.
The US dollar index (DXY), which tracks the US dollar against six major peer currencies, decreased by 9.4%, its worst year
since 2017. The depreciation of the US dollar was partly driven by the erosion of the US interest rate advantage over its
peers, as the Federal Reserve resumed cutting interest rates later in the year after other large central banks were near or
at the end of their easing cycles.
The combination of falling inflation and central bank interest rate reductions contributed to the best annual returns in
global fixed income since 2020, based on Bloomberg’s Global Bond Aggregate index. Finally, gold delivered a return of
63% in US-dollar terms, its largest gain since 1979, lifted by strong demand as many central banks diversified their
reserves into gold, and strong investment demand supported the price.
Annual Report 2025 |
Our business model and environment | Our environment 14
Economic and market outlook for 2026
1
We expect the economic factors that supported global growth in 2025 to persist through 2026, including continued
investment in AI and generally healthy consumer spending across major regions. Although most major central banks are
unlikely to cut interest rates further, we expect low interest rates to persist throughout the year, providing an economic
tailwind. Fiscal policy also appears set to stimulate growth in several leading economies, including the US, Germany and
Japan. Geopolitical developments have the potential to raise risk premiums, and higher energy prices, if sustained, pose
a potential downside risk to the outlook. While uncertainty is significant, our base case view is that energy prices will not
stay high enough for long enough to materially weaken the global economy. Our base case projection is for only a slight
slowing of global GDP growth in 2026, to a still healthy 3.3%.
We expect US GDP to grow by 2.6%, accelerating from 2.2% in 2025, with fiscal stimulus and the lagged effect of
interest rate cuts offsetting the drag from a weaker labor market. Consumer demand should continue to be underpinned
by solid salary growth and healthy household balance sheets among middle- and upper-income class groups.
For the Eurozone, we expect GDP growth of just over 1% in 2026, down from 1.5% in 2025. Consumer sentiment
remains cautious, higher gas prices could present a headwind, and we expect growth in certain local markets, such as
Spain, to decrease to more normal levels after strong growth in 2025. At the same time, we expect Germany’s fiscal
stimulus and infrastructure spending to provide a boost in 2026. A healthier banking system is now better able to support
lending, and we expect an ongoing recovery in demand for goods, supporting the manufacturing sector in the Eurozone.
We forecast Swiss GDP growth of 1.3%. Although US tariffs and a strong Swiss franc represent headwinds, growth
should pick up in the second half of the year on the back of a rebound in the German economy.
We expect China to deliver GDP growth of 4.5%, with its five-year plan prioritizing technology innovation and industrial
upgrades. The rivalry with the US has the potential to create headwinds, but China’s ongoing focus on domestic upgrades
and supply-chain diversification is expected to help support economic stability, despite external uncertainty.
Regarding inflation, provided energy price rises are not sustained, we expect the global average to slow further to 2.9%
in 2026. In the Eurozone, inflation could fall below the central bank’s target, to average 1.8%, based on our forecasts.
We see consumer prices in Switzerland rising by just 0.3%, after 0.2% in 2025, at the bottom end of the SNB’s target
rate of between 0% and 2%. However, after interest rate cuts in 2024 and 2025, we are not forecasting further easing
from either the ECB or the SNB, although the SNB has signaled its willingness to intervene in currency markets in case of
excess Swiss franc strength. We expect prices to rise by 2.7% in the US, reflecting an unchanged inflation rate from
2025. Although this is above the Federal Reserve’s goal, we expect the US central bank to respond to a subdued labor
market by cutting rates twice in 2026.
A combination of a decent economic backdrop and continued optimism about the potential of AI to boost earnings
should lead to another year of gains for global stocks, in our view, albeit with likely volatility driven by concerns about
geopolitical developments, AI competition and credit risk. We expect earnings per share growth for the MSCI All Country
World index of almost 12% in 2026 to support market upside, despite historically elevated valuations. We also expect
another positive year for fixed income, given solid headline yields and the potential for major benchmark yields to fall
should inflation slow and central bank rates remain low.
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Our business model and environment | Regulation and supervision 15
Regulation and supervision
As a financial services provider based in Switzerland, the UBS Group is subject to consolidated supervision by the Swiss
Financial Market Supervisory Authority (FINMA). The Group’s entities are also regulated and supervised by authorities in
each country where we conduct business. Through UBS AG and
UBS Switzerland AG, which are licensed as banks in
Switzerland, UBS may engage in a full range of financial services activities in Switzerland and abroad, including personal
banking, commercial banking, investment banking and asset management.
UBS is a global systemically important bank (a G-SIB), as designated by the Financial Stability Board, and a systemically
relevant bank (an SRB) in Switzerland. UBS Group entities are subject to stricter regulatory requirements and supervision
than other Swiss banks.
›
Refer to the “Integration of Credit Suisse” section of this report for more information
›
Refer to the “Regulatory and legal developments” and “Risk factors” sections of this report for more information
Regulation and supervision in Switzerland
Supervision
UBS Group AG and its subsidiaries, including UBS AG, are subject to consolidated supervision by FINMA under the Swiss
Banking Act and related ordinances, which impose standards for matters such as capital adequacy and risk diversification
rules, liquidity, internal control systems, business conduct, and corporate governance. FINMA meets its statutory
supervisory responsibilities through licensing, regulation, supervision and enforcement. It is responsible for prudential
supervision. It undertakes direct inspections and mandates audit firms to perform regulatory audits and other supervisory
tasks on its behalf.
Capital adequacy and liquidity regulation
As an internationally active Swiss systemically important bank (an SIB), UBS is subject to capital and total loss-absorbing
capacity (TLAC) requirements at both the Group level, for UBS Group AG, and the parent bank level, for UBS AG, that
are based on both risk-weighted assets and the leverage ratio denominator, and are among the most stringent in the
world. UBS Group AG, UBS AG and UBS Switzerland AG are also subject to liquidity requirements and to minimum long-
term funding requirements for Swiss SIBs.
›
Refer to the “Capital management” section of this report for more information about the Swiss SRB framework and the Swiss
too-big-to-fail (TBTF) requirements
›
Refer to the “Liquidity and funding management” section of this report for more information about liquidity coverage ratio, net
stable funding ratio requirements and the Swiss TBTF liquidity requirements
Regulation and supervision outside Switzerland
Regulation and supervision in the US
In the US, UBS is subject to regulation and supervision by the Board of Governors of the Federal Reserve System (the
Federal Reserve Board) under a number of laws. UBS Group AG and UBS AG are subject to the Bank Holding Company
Act, pursuant to which the Federal Reserve Board has supervisory authority over our US operations.
In addition to being a financial holding company under the Bank Holding Company Act, UBS AG has US branches, which
are authorized and supervised by the Office of the Comptroller of the Currency (the OCC). UBS AG is registered as swap
dealer with the Commodity Futures Trading Commission (the CFTC) and as securities-based swap dealer with the
Securities and Exchange Commission (the SEC).
UBS Americas Holding LLC is the intermediate holding company for our operations in the US outside of the UBS AG
branch network, as required under the Dodd–Frank Act, and is subject to requirements established by the Federal Reserve
Board related to risk-based capital, liquidity, the Comprehensive Capital Analysis and Review (CCAR) stress-testing and
capital planning process, and resolution planning and governance.
UBS Bank USA, a Federal Deposit Insurance Corporation (FDIC)-insured depository institution subsidiary, is licensed and
regulated by state regulators in Utah and is also supervised by the FDIC. It has received conditional approval from the
OCC to convert to a national charter and expects to complete the conversion in 2026. Following conversion, the OCC
will be the primary banking regulator for UBS Bank USA.
UBS Financial Services Inc., UBS Securities LLC, Credit Suisse Securities (USA) LLC and several other US subsidiaries of UBS
are subject to regulation by a number of different government agencies and self-regulatory organizations, including the
SEC, the Financial Industry Regulatory Authority, the CFTC, the Municipal Securities Rulemaking Board and national
securities exchanges, depending on the nature of their business. Certain of our activities in the US are subject to regulation
by the Consumer Financial Protection Bureau.
Regulation and supervision in the UK
Our regulated UK operations are mainly subject to the authority of the Prudential Regulation Authority (the PRA), which
is part of the Bank of England (the BoE), and the Financial Conduct Authority (the FCA). We are also subject to the rules
of the London Stock Exchange and other securities and commodities exchanges of which UBS AG is a member.
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Our business model and environment | Regulation and supervision 16
UBS AG has a UK-registered branch, UBS AG London Branch, which serves as a global booking center for our Investment
Bank. UBS AG also has regulated subsidiaries in the UK that provide asset management services. Credit Suisse
International and Credit Suisse (UK) Limited are authorized and regulated by the FCA and subject to the authority of the
PRA.
Regulation and supervision in Europe
UBS Europe SE, headquartered in Germany, is subject to the direct supervision of the European Central Bank (the ECB),
as well as to conduct, consumer protection and anti-money-laundering-related supervision by the German Federal
Financial Supervisory Authority and by the German Bundesbank. The entity is subject to EU and German laws and
regulations. UBS Europe SE maintains branches in Denmark, France, Ireland, Italy, Luxembourg, the Netherlands, Poland,
Portugal, Spain, Sweden and Switzerland and is subject to conduct supervision by authorities in all those countries.
In Italy, Credit Suisse (Italy) SpA has been integrated into UBS Europe SE and UBS has relinquished the banking license of
Credit Suisse Bank (Europe) SA. In Spain, UBS AG Spain Branch is supervised by the Bank of Spain, the Servicio Ejecutivo
de la Comisión de Prevención del Blanqueo de Capitales and the Comisión Nacional del Mercado de Valores.
Regulation and supervision in Asia Pacific
We operate in numerous locations in Asia Pacific, including Singapore, the Hong Kong SAR, mainland China, Australia
and Japan. The operations in these locations are subject to regulation and supervision by local financial regulators. Our
Asia Pacific regional hubs are in Singapore and the Hong Kong SAR.
In Singapore, UBS AG Singapore Branch and UBS Securities Pte Ltd are supervised by the Monetary Authority of Singapore
and the Singapore Exchange. UBS Asset Management (Singapore) Ltd is supervised by the Monetary Authority of
Singapore.
In the Hong Kong SAR, UBS AG Hong Kong Branch is supervised by the Hong Kong Monetary Authority and the Hong
Kong Securities and Futures Commission. UBS Securities Hong Kong Limited, UBS Securities Asia Limited and UBS Asset
Management (Hong Kong) Limited are supervised by the Hong Kong Securities and Futures Commission. In addition, UBS
Securities Hong Kong Limited is supervised by Hong Kong Exchanges and Clearing Limited.
In mainland China, we have multiple licenses to operate the business lines of UBS AG, and the various entities are subject
to regulation by a number of different government agencies. The People’s Bank of China oversees China’s macro capital
markets policies and ensures coordinated supervisory approaches by the National Financial Regulatory Administration
(the China Banking and Insurance Regulatory Commission until May 2023), the China Securities Regulatory Commission
and a number of exchanges.
In Australia, UBS AG Australia Branch is supervised by the Australian Prudential Regulation Authority, the Australian
Securities and Investments Commission, the Australian Transaction Reports and Analysis Centre, the Reserve Bank of
Australia, and the Australian Securities Exchange. UBS Securities Australia Ltd is supervised by the Australian Securities
and Investments Commission, the Australian Transaction Reports and Analysis Centre and the Australian Securities
Exchange. UBS Asset Management (Australia) Limited is supervised by the Australian Securities and Investments
Commission and the Australian Transaction Reports and Analysis Centre.
In Japan, UBS Securities Japan Co., Ltd. is supervised by the Financial Services Agency and the Japan Exchange Group.
UBS AG Tokyo Branch is supervised by the Financial Services Agency and the Bank of Japan. UBS SuMi TRUST Wealth
Management Co., Ltd. is supervised by the Financial Services Agency and the Japanese Ministry of Finance. UBS Asset
Management (Japan) Ltd and UBS Japan Advisors Inc. are supervised by the Financial Services Agency.
Financial crime prevention
Combating money laundering and terrorist financing has been a major focus of many governments in recent years. Laws
and regulations require effective policies, procedures and controls to detect, prevent and report money laundering and
terrorist financing, and the verification of client identities.
In Switzerland, the introduction of a transparency register will further strengthen the anti-money laundering (AML)
framework through increased ownership and control information. At EU level, the AML reform package, including the
Regulation establishing the EU Anti-Money-Laundering Authority, is aimed at strengthening EU-wide AML rules, including
by harmonizing requirements across EU Member States and imposing stricter due diligence obligations. The US AML
regulation is in an active implementation phase, with the Anti-Money-Laundering Act of 2020 driving expanded risk-
based obligations, enhanced information sharing and the rollout of new requirements that have not yet been codified.
At the same time, regulators are increasing supervisory scrutiny and enforcement expectations, emphasizing effectiveness,
data quality and the accountability of senior management rather than mere technical compliance.
Failure to introduce and maintain adequate programs to prevent money laundering and terrorist financing can result in
significant legal and reputational risk and fines.
We are also subject to laws and regulations prohibiting corrupt or illegal payments to government officials and other
persons, including the US Foreign Corrupt Practices Act and the UK Bribery Act. We maintain policies, procedures and
internal controls intended to comply with those regulations.
›
Refer to “Non-financial risk” in the “Risk management and control” section of this report for more information
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Our business model and environment | Regulation and supervision 17
Data protection
We are subject to regulations concerning the use and protection of customer, employee and other personal and
confidential information. This includes provisions under Swiss law, the EU General Data Protection Regulation (the GDPR),
US laws and laws of other jurisdictions.
In 2025, data protection developments were dominated by new artificial intelligence (AI) rules (including the first
enforcement of the EU Artificial Intelligence Act), tighter scrutiny of cross-border data transfers, and the continued spread
and toughening of privacy laws, and enforcement globally. As UBS AG is a global bank, these translate into strategic
themes around AI and data governance, cross-border data and cloud risk, regulatory fragmentation and rising
expectations for data sharing, transparency and customer control.
›
Refer to the “Risk factors” section of this report for more information about regulatory change
Recovery and resolution
The existing Swiss regulations require each SRB to establish an emergency plan to maintain systemically important
functions in case of impending insolvency. In response to these Swiss requirements and similar ones in other jurisdictions,
UBS has developed the Global Recovery Plan (the GRP), the Global Resolution and Restructuring Strategy and the Swiss
Emergency Plan (the SEP), as well as other local recovery and resolution plans for its key regions (to the extent required).
The plans describe how to restructure and / or wind down businesses if the Group could not otherwise be stabilized.
FINMA evaluates the recovery and resolution plans of Swiss SRBs on a regular basis. Similarly, the local recovery and
resolution plans are evaluated by the respective local authorities.
Global Recovery Plan
The GRP sets forth measures to restore financial strength if UBS comes under severe capital or liquidity stress. Its objective
is to sustainably stabilize the Group in case of a crisis without government intervention. Quantitative and qualitative
triggers are monitored and are subject to predefined governance and escalation processes. Recovery options are linked
to owners and checklists, with the objectives of preserving capital, raising capital or liquidity, or disposing of or winding
down businesses. In September 2025, FINMA announced that a full assessment of UBS’s recovery plan was not possible,
due to the ongoing integration of Credit Suisse into UBS and the resulting rapid pace of change. UBS submitted an
updated GRP in summer 2025, which is currently under review by FINMA.
Global Resolution and Restructuring Strategy
FINMA produces a global resolution plan for UBS setting out measures that FINMA can take to resolve UBS in an orderly
manner. FINMA’s preferred strategy for UBS is a single point of entry (SPE) strategy involving write-down of the Group’s
remaining equity and additional tier 1 (AT1) and tier 2 instruments, conversion of senior unsecured bonds of
UBS Group AG to equity, if required, and an internal recapitalization of undercapitalized subsidiaries to shift losses to
UBS Group AG. Post-resolution restructuring measures could include disposals and / or wind-down of businesses and
disposals of assets. Over the years, UBS made structural, financial and operational changes to facilitate these measures
and is confident that a resolution of the Group is operationally executable and legally enforceable. FINMA’s September
2025 resolution report on UBS confirms that a bail in remains operationally executable for UBS, and an SPE resolution
strategy remains the preferred strategy for UBS.
Alternative Resolution Strategy
Following the Credit Suisse crisis, related parliamentary investigations and lessons learned, FINMA determined that UBS’s
resolution planning must be further developed to increase the number of options available to FINMA in case of a
resolution. These additional options, which will be documented in the Alternative Resolution Strategy going forward,
should include a forced sale of the Group in its entirety and a solvent market exit (either via disposal or wind-down or a
combination of both). In case of an insolvency threat, the additional resolution options would allow the authorities to
choose the approach with the best prospect of safeguarding financial stability internationally and maintaining systemically
important functions in Switzerland, without having recourse to taxpayers’ money. Initial concepts for the Alternative
Resolution Strategy were developed by UBS and are under review by FINMA; however, their implementation is subject to
the ongoing legislative change process.
Swiss Emergency Plan
The SEP demonstrates how UBS’s systemically important functions and critical operations in Switzerland can continue if
the UBS Group cannot be restructured. This is achieved mainly by operating these functions in a separate legal entity,
UBS Switzerland AG, and by ensuring its financial and operational self-sufficiency to enable its continued operation
throughout a crisis. Although UBS’s SEP was deemed largely compliant with current regulatory requirements, FINMA has
determined that it will need to be integrated into the new Alternative Resolution Strategy going forward (which, in turn,
is subject to the ongoing legislative change process as noted under “Alternative Resolution Strategy” above).
Other local recovery and resolution plans
The US resolution plan sets out the steps that could be taken to resolve the US intermediate holding company, UBS
Americas Holding LLC, and its subsidiaries if it suffered material financial distress and UBS Group was unable or unwilling
to provide financial support. As required by US regulations, UBS’s US plan contemplates that UBS Americas Holding LLC
will commence US bankruptcy proceedings. Prior to this, the plan envisages UBS Americas Holding LLC downstreaming
financial resources to its respective subsidiaries to facilitate an orderly wind-down or disposal of businesses. UBS filed its
updated US resolution plan in October 2025.
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Our business model and environment | Regulation and supervision 18
UBS Europe SE updates a local recovery plan annually based on ECB requirements as well as resolution planning
information and capabilities based on Single Resolution Board requirements. On the basis of such information, the
Internal Resolution Team, composed of members of the Single Resolution Board, produces a resolution plan for
UBS Europe SE.
Other local recovery and resolution planning is in place for various UBS AG entities and jurisdictions.
Crisis management framework
The UBS Group’s crisis management framework assigns responsibility and actions depending on the nature of the stress
incident and the scale of the response needed. As such, it connects the recovery and resolution planning with the earlier
stages of crisis planning.
–
For incident, risk and crisis management, the Group Crisis Task Force works with incident management teams that
provide monitoring and early-warning indicators at the local / regional level, without needing to activate protocols at
the Group level. If a local response is insufficient, global task forces and crisis management teams provide decision-
making guidance and coordination, including crisis management plans, protocols and playbooks, and contingency
funding plans.
–
The Group Executive Board (the GEB) and the Board of Directors (the BoD) would evaluate and decide upon the need
to activate the GRP if a stress event has reached a severity requiring activation based on the GRP’s recovery risk
indicators.
–
FINMA has the authority to determine whether the point of non-viability, as defined by Swiss law, has been reached
and, as part of the Global Resolution and Restructuring Plan for UBS, has the power to order the bail in of creditors to
recapitalize and stabilize the Group, limit payments of dividends and interest, alter the legal structure of the Group,
take actions to reduce business risk, and order a restructuring of the Group.
Regulatory trends
The regulatory environment continues to evolve, with some policymakers aiming to simplify and / or reduce regulatory
constraints, while others remain focused on addressing vulnerabilities revealed by the March 2023 banking turmoil. In
Switzerland, for example, authorities are advancing reforms to the TBTF regime aimed at further strengthening financial
stability. Following the consultations on stricter capital and liquidity requirements, the focus is now shifting to
implementation through legislation and ordinances. This includes finalizing the Capital Adequacy Ordinance and foreign
subsidiary capital rules, as well as advancing consultation drafts on other regulatory areas, such as enhanced governance
and strengthened recovery and resolution planning.
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Our business model and environment | Regulation and supervision 19
In contrast, other major jurisdictions, such as the EU, the UK and the US, are increasingly shifting their policy and
regulatory approaches toward promoting a pro-growth and competitiveness agenda. The US administration’s
deregulatory stance has prompted reviews of supervisory standards for banks and caused delays in major regulatory
initiatives, including the implementation of Basel III, while the EU and the UK have postponed or streamlined regulatory
initiatives to reduce administrative burdens on companies and mobilize private capital. These divergent approaches are
contributing to concerns over regulatory fragmentation, with differences in timelines and content posing challenges for
globally active banks.
Digitalization and digital asset regulations continue to progress, with global policy responses adapting to rapid technical
developments. The EU Markets in Crypto-Assets Act and the US GENIUS Act are establishing new frameworks for
stablecoins and digital assets, and Switzerland is consulting on new stablecoin and crypto service provider licenses. The
Basel Committee on Banking Supervision (the BCBS) announced a targeted review of its prudential standards for banks’
crypto asset exposures. AI has also attracted heightened supervisory and regulatory attention, with the EU’s expansive AI
Act entering into force, while other jurisdictions opt for sector-specific or incremental approaches. However, as an
expression of strategic technology competition, the focus in many countries has shifted from strict safety to supporting
responsible AI innovation. Cybersecurity and third-party risk management concerns also remain prominent, with
expanded incident reporting and critical third-party regimes under development in many jurisdictions. At the international
level, the BCBS has approved its final principles for the sound management of third-party risk, and the Financial Stability
Board has finalized the common Format for Incident Reporting Exchange.
Sustainable finance was marked by important revisions of regulations in certain jurisdictions, driven by competitiveness
and growth considerations, but with very different approaches leading to further fragmentation. The EU is seeking to
simplify and refine its framework to reduce the regulatory and reporting burden on businesses, while the US is pursuing
a path of deregulation. In this context, Switzerland has paused its work on sustainability reporting and sustainability due
diligence pending the finalization of the EU review, while the UK is cautiously developing its own framework with a focus
on international alignment and interoperability. In contrast, with the growing frequency of climate-related disasters,
supervisory attention to improve the management of climate and nature-related financial risks continues to increase,
especially in Europe. In addition, nature-related topics, transition finance and carbon markets are increasingly gaining
policy traction globally, with significant efforts underway to support their global convergence through standardized
frameworks and regulations.
Financial stability risks in the non-bank financial intermediation (NBFI) sector are an increasing concern, with global work
aiming to improve NBFI data availability to make risk assessments more credible, starting with initial work in the areas of
leverage and private credit, due to their high expected materiality with regard to financial stability. In the UK, a system-
wide stress test has been launched to further assess the systemic risk, mainly by private markets, in the event of stress.
Anti-money-laundering reforms in Switzerland will impact our due diligence processes, while the global sanctions
environment remains complex, including the continued implementation of additional sanctions measures against Russia
by the EU, the US and Switzerland. In addition, market structure reforms, such as shortening the standard settlement
cycle for financial trades to one business day after the trade date (T+1), from two business days after the trade date (T+2),
are progressing in Europe.
Looking ahead to an environment marked by geopolitical uncertainties, shifting global dynamics and the risk of increasing
regulatory fragmentation, we are convinced that our prudent adaptations in a dynamic environment and our diversified
business model put us in a solid position to absorb upcoming changes to the regulatory framework.
›
Refer to the “Regulatory and legal developments” section of this report for more information
Regulatory and legal developments
Developments in Switzerland
In June 2025, the Swiss Federal Council published regulatory proposals that aim to further strengthen banking stability
in Switzerland. Proposed measures to be submitted to the Swiss Parliament for enactment would exclude from common
equity tier 1 (CET1) capital investments in foreign subsidiaries of systemically important banks (SIBs), include additional
requirements for the recovery and resolution of SIBs, add measures to increase the potential for obtaining liquidity via
the Swiss National Bank (the SNB), introduce a Senior Managers Regime for banks, and provide additional powers for the
Swiss Financial Market Supervisory Authority (FINMA).
Proposed measures at the ordinance level would exclude capitalized software and deferred tax assets (DTAs) on temporary
differences from CET1 capital, add stricter requirements for prudential valuation adjustments (PVAs) of assets and
liabilities, require suspension of interest payments for additional tier 1 (AT1) capital instruments in the event of a
cumulative loss over four quarters, and introduce measures that aim to enable FINMA and other authorities to better
assess the situation of banks in a liquidity crisis. The Swiss Federal Council has proceeded towards implementation of
these recommendations through several legislative and regulatory packages.
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Our business model and environment | Regulatory and legal developments 20
A public consultation on proposed measures at the ordinance level ended in September 2025. The Swiss Federal Council
is expected to publish final amendments to the ordinance in the first half of 2026, with entry into force not expected
before January 2027.
A separate public consultation on proposed legislative amendments to capital requirements related to foreign subsidiaries
ended in January 2026. The proposed changes would require the deduction of investments in foreign subsidiaries of SIBs
from CET1 capital. The proposal states that the amendments would enter into force in 2028, at the earliest, starting with
a 65% deduction requirement in the first year and increasing to 100% by 5-percentage-point increments each year over
seven years. The Swiss Federal Council is expected to submit its proposal to the Swiss Parliament in the first half of 2026.
The Swiss Federal Council is also expected to launch consultations on additional legislative measures in the summer of
2026, including incremental requirements for the recovery and resolution plans of SIBs, measures aimed at increasing
the potential for obtaining liquidity via the SNB, the introduction of an enhanced accountability framework for senior
managers of banks, and the provision of additional powers for FINMA. Following the consultation, these measures are
expected to be submitted to the Parliament in the first half of 2027, with entry into force expected in 2028 or 2029. In
addition, a public consultation on amendments to the Liquidity Ordinance is expected to be launched in the summer of
2026. The proposals are expected to set minimum requirements for maintaining borrowing capacity for emergency
liquidity assistance.
Estimated incremental capital from proposed changes to the capital framework
We currently estimate that UBS AG would be required to hold additional CET1 capital of around USD 22bn if all capital
measures were implemented as proposed by the Swiss Federal Council. This estimate includes around USD 20bn related
to the full deduction of UBS AG’s investments in foreign subsidiaries, of which approximately USD 6bn would be required
at the start of the proposed phase-in period, and around USD 3bn from the potential deduction of DTAs on temporary
differences, capitalized software and PVAs.
The incremental CET1 capital of USD 22bn at UBS AG would increase UBS Group AG’s CET1 capital ratio to around
18.5%, calculated from its target ratio of around 14%. The proposed measures related to DTAs on temporary differences,
capitalized software and PVAs would eliminate around USD 11bn of net CET1 capital at UBS Group AG, which, as a result
of this elimination, would reduce the estimated CET1 capital ratio for the Group from 18.5% to 16.5%.
This current estimated incremental capital of USD 22bn resulting from the proposed changes in Swiss capital requirements
would be on top of the additional capital UBS is required to hold as a result of the acquisition of the Credit Suisse Group.
This includes around USD 9bn to remove the regulatory concessions granted to Credit Suisse and around USD 6bn to
meet the progressive add-on due to the increased leverage ratio denominator (LRD) and higher market share of the
combined business. The phase-in of the capital requirements relating to the increases in LRD and market share
commenced on 1 January 2026 and will be completed by 1 January 2030.
Altogether, if the proposed changes by the Swiss Federal Council were adopted as proposed, UBS would be required to
hold around USD 37bn in additional CET1 capital.
These estimates have been calculated based on our balance sheet at 31 December 2025, assume that all capital measures
are adopted as currently proposed and use an assumed CET1 capital ratio of 12.5% for UBS AG, the lower end of our
target range of 12.5–13.0%, and 14.0% for UBS Group overall. The estimates also reflect capital repatriations of USD 3bn
from UK subsidiaries planned for 2026.
The estimate of UBS AG‘s incremental capital requirements at 31 December 2025 is around USD 2bn lower than the
estimate of USD 24bn we published on 6 June 2025 in response to the Swiss Federal Council proposal, which was based
on our first quarter 2025 balance sheet, (and USD 4bn lower than the estimate of USD 26bn based on UBS AG’s target
capital ratio of 12.5%). The reduction primarily results from accelerated repatriation of capital from UBS AG subsidiaries
enabled by the rapid wind-down of Non-core and Legacy, timely and successful execution of our integration plans, and,
in the case of the US, improving profitability expectations and improvements in our most recent Internal Capital Adequacy
Assessment Process (ICAAP) and Dodd-Frank Act Stress Test (DFAST) results.
UBS AG’s CET1 capital ratio of 14.2% at 31 December 2025 reflects these accelerated capital repatriations. As previously
communicated, we expect UBS AG’s CET1 capital ratio to remain above our target levels in the near term, mainly due to
leverage ratio considerations driven by the weakening of the US dollar.
UBS’s position
UBS has submitted responses to the consultations on the proposed measures at the ordinance level and on legislative
amendments. UBS overall supports the Swiss Federal Council's objective of drawing lessons from the Credit Suisse crisis
and strengthening the regulatory framework with targeted, proportionate and internationally aligned measures.
However, the proposed full deduction of foreign subsidiaries from CET1 capital clearly does not meet these criteria and
is excessive. In addition, UBS has outlined that the proposed regulatory treatment of capitalized software, DTAs on
temporary differences and PVAs is a combination of the maximum requirements of various jurisdictions and does not
give due consideration to the ultimate impact of the overall package, comparisons to the capital regimes in peer countries
or the cost of such extreme measures. Switzerland already has one of the strictest regulatory capital regimes, with
substantial progressive capital surcharges and a conservative and early implementation of the final Basel III rules. The
Swiss Federal Council’s proposals would significantly increase the requirements and would contrast sharply with
developments across Europe, and in the US, which have proposed, or are expected to implement, less restrictive capital
regimes.
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Our business model and environment | Regulatory and legal developments 21
FINMA resolution report on UBS
In September 2025, FINMA published its 2025 resolution report on UBS related to the 2024 fiscal year. FINMA concluded
that UBS remains resolvable under UBS’s existing preferred resolution strategy, which includes a recapitalization via a
bail-in at the Group holding company level.
›
Refer to “Recovery and resolution” in the “Regulation and supervision” section of this report for more information
Developments related to the implementation of the final Basel III standards
In Switzerland, the amendments to the Capital Adequacy Ordinance (the CAO) that incorporate the final Basel III
standards into Swiss law entered into force on 1 January 2025. The adoption of the final Basel III standards led to a similar
impact on UBS AG consolidated as on UBS Group, with an USD 8.6bn reduction in UBS AG’s RWA. A USD 6.5bn increase
in market risk RWA resulting from the implementation of the Fundamental Review of the Trading Book (the FRTB)
framework was more than offset by a USD 9.0bn reduction in operational risk RWA and a USD 6.1bn reduction in credit
and counterparty credit risk RWA. The output floor, which is being phased in until 2028, is currently not binding for the
UBS AG. The final Basel III implementation in Switzerland had a cumulative net impact on UBS AG of adding around
USD 60bn of RWA since UBS started preparing for its adoption with a series of model updates and methodology changes
over the last ten years.
In January 2026, the Prudential Regulation Authority (the PRA) published its final policy statements implementing the
Basel 3.1 standards in the UK. Implementation remains set for 1 January 2027, with full phase-in by 1 January 2030,
except for the implementation of the internal model approach for market risk (the FRTB Internal Model Approach), which
has been postponed to 1 January 2028. The FRTB regulation for standardized and advanced standardized approaches
will apply from 1 January 2027. The impact of the UK Basel 3.1 regulations on UBS is expected to be immaterial.
Annual Report 2025 |
Our business model and environment | Regulatory and legal developments 22
In the EU, the final Basel III requirements became applicable as of 1 January 2025, except for the FRTB regulation, the
implementation of which has been delayed until 1 January 2027, as confirmed by the European Commission (the EC) in
September 2025. In addition, the EC conducted a public consultation, concluded in January 2026, on policy options to
temporarily mitigate negative impacts stemming from the absence of a level playing field with regard to the
implementation of FRTB rules. UBS Europe SE is subject to Basel III regulations in the EU. The impact on UBS can only be
determined once the EC publishes its final decision.
In the US, banking agencies, including the Federal Reserve Board, have been discussing amendments to their original
proposals regarding the implementation of the final Basel III standards. We expect that a re-proposal will be issued in the
first half of 2026. UBS Americas Holding LLC is subject to the US requirements. The impact on UBS can only be determined
once the US publishes its final rules.
US supervisory changes
In August 2025, the Federal Reserve Board reduced the stress capital buffer (the SCB) of UBS Americas Holding LLC, our
US-based intermediate holding company, to 5.2%, from 9.3%, applicable from 1 October 2025 under the Federal
Reserve Board’s SCB rule, resulting in a total CET1 capital requirement of 9.7%. The SCB for UBS Americas Holding LLC
is derived from the results of the Federal Reserve Board’s 2025 DFAST released in June 2025.
Earlier in 2025, the Federal Reserve Board proposed measures to reduce the volatility of the SCB requirements by
averaging the capital stress test results from the past two years, with the aim of making capital planning more predictable
for banks. In addition, the Federal Reserve Board proposed moving the effective date for the annual SCB updates from
1 October to 1 January to allow more time to meet the new requirements. We expect the final rules to be published in
the first half of 2026.
US federal banking agencies have undertaken several initiatives to reform supervisory standards with the stated objective
of prioritizing material financial risks. In October 2025, the Federal Deposit Insurance Corporation (the FDIC) and the
Office of the Comptroller of the Currency (the OCC) issued two proposals. The first proposal aims to clarify supervisory
standards regarding the circumstances under which a deficiency would rise to the level of a supervisory finding or
enforcement action. The second proposal would prohibit examiners from criticizing or taking adverse action on the basis
of reputational risk. In November 2025, the Federal Reserve Board released a statement of supervisory operating principles
that outlines objectives for supervision, expressing its focus on material financial risks over process-based concerns. The
Federal Reserve Board has also finalized a rule to amend its supervisory rating framework for large bank holding
companies. Under the rule, which became effective on 16 January 2026, the Federal Reserve Board will take a more
holistic approach in determining whether it considers covered companies to be well managed. The impact of these will
depend on the implementation by examination staff at these agencies.
In addition, in August 2025, a presidential executive order directed the US federal banking agencies to identify supervised
institutions that have previously engaged or are currently engaged in “politicized or unlawful debanking”, which the
order defined as restrictions on access to financial services based on a customer’s political or religious beliefs or lawful
business activities. In December 2025, the OCC released preliminary findings from its supervisory review of debanking
activities at the nine largest national banks that it supervises. The OCC determined that the banks had policies or practices
that limited access to banking services for certain customers and has recommended documentation of individualized,
objective, risk-based analyses for any decision to restrict access to banking services. The full impact of this issue will be
dependent on the outcome of ongoing debanking reviews of the OCC and other federal banking agencies.
In January 2026, the OCC issued a conditional approval for UBS Bank USA’s application to become a national bank.
Developments related to environmental, social and governance matters, and sustainable finance
Developments in the EU to simplify regulations regarding environmental, social and governance matters
In February 2025, the EC published proposals to simplify the requirements of the Corporate Sustainability Reporting
Directive (the CSRD), the reporting requirements under the Taxonomy Regulation and the Corporate Sustainability Due
Diligence Directive (the CSDDD), with a view to reducing the reporting and regulatory burden, in particular for small and
medium-sized enterprises, and to enhancing the EU’s competitiveness. In April 2025, EU legislators approved the
directive, delaying certain application dates of the CSRD and the CSDDD, with that directive entering into force on
17 April 2025.
In July 2025, the EC adopted amendments to the European Sustainability Reporting Standards (the ESRS) to allow wave
one companies subject to CSRD reporting to omit certain of the ESRS disclosures for the 2025 and 2026 financial years.
Also in July 2025, the EC adopted final measures to simplify the disclosure requirements under Art. 8 of the EU Taxonomy
Regulation.
In July 2025, Germany’s Federal Ministry of Justice and Consumer Protection published a new draft bill to implement the
CSRD. While legislative steps were taken, full enactment before 31 December 2025, for application to the 2025 financial
year, has not taken place. As a result, CSRD reporting was not made mandatory in Germany for the 2025 financial year
for large companies that are subject to wave one reporting requirements of the CSRD, which would have included
UBS AG (having selected Germany as its EU home member state under the EU Transparency directive).
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Our business model and environment | Regulatory and legal developments 23
In December 2025, EU legislators reached a final agreement on proposals to simplify the requirements of the CSRD and
the CSDDD. The agreement provides for a significantly reduced scope of application of both the CSRD and the CSDDD,
while maintaining their extra-territorial application. Companies within the scope of the CSDDD will be required to take a
risk-based approach when conducting due diligence and will no longer have to adopt a transition plan for climate change
mitigation. EU Member States will have to transpose the revised CSRD into national law within the 12 months following
its entry into force, which is expected in the first quarter of 2026. With regard to the CSDDD, the transposition deadline
has been further postponed until July 2028, with compliance to be achieved by July 2029. UBS AG and UBS Europe SE,
would remain within the scope of the revised CSRD and become subject to CSRD reporting once Germany has transposed
this directive. We are assessing the expected impact of scope changes of the revised CSDDD.
On 1 January 2026, simplification measures to the reporting requirements under Art. 8 of the EU Taxonomy Regulation
became effective. Companies have the option of implementing the changes for the 2025 financial year or the 2026
financial year. The measures aim to reduce the burden and costs of taxonomy reporting for companies pending the
completion of the comprehensive review of the EU Taxonomy Regulation and related reporting rules in 2026. UBS is
applying the changes to the taxonomy reporting of UBS AG standalone and UBS Europe SE consolidated for the 2025
financial year.
›
Refer to the “Sustainability statement” section of the UBS AG Annual Report 2025 (for filing in the EU), available under “Annual
reporting” at
ubs.com/investors
, for more information
US climate disclosure requirements
In March 2025, the US Securities and Exchange Commission (the SEC) announced that it would end its legal defense of
its 2024 climate disclosure regulation. The implementation of the regulation had previously been suspended by the SEC
as a result of legal challenges. Certain US states have adopted or intend to adopt specific state-level climate risk disclosure
requirements for companies operating in their respective states. UBS will monitor these developments to assess impact
as rules are finalized.
The Swiss Federal Council pauses the revision of the Ordinance on Climate Disclosures
In June 2025, the Swiss Federal Council decided to pause the revision of the Ordinance on Climate Disclosures until the
approval of the ongoing revision of the overarching legislation on sustainability reporting in the Swiss Code of Obligations
or until 1 January 2027, at the latest.
Changes to the UK senior management function and material risk taker compensation schemes
In October 2025, the Prudential Regulation Authority and Financial Conduct Authority adopted changes to their
regulations on the compensation of senior managers and material risk takers. The revised regulations generally reduce
the portion of incentive compensation subject to mandatory deferral, reduce the mandatory deferral periods for incentive
compensation to a uniform four years, eliminate post-vesting blocked periods and permit awards to accrue interest and
dividends. Changes are generally effective immediately and companies may elect to apply certain elements of the revised
requirements to awards in the current compensation year, as well as to outstanding deferred incentive compensation
plans. UBS is assessing the changes and the related impacts.
Mutual recognition agreement with the UK approved by the Swiss Parliament
In March 2025, the Swiss Parliament approved the Berne Financial Services Agreement (the BFSA) with the UK, which
facilitates cross-border financial activities based on a new model for regulatory cooperation and outcomes-based mutual
recognition of domestic rules. The BFSA is supplemented by an enhanced and closer supervisory process and additional
supervisory arrangements where new market access is granted. Regulations to implement the BFSA in the UK were
submitted to UK Parliament in July 2025 and entered into force on 1 January 2026.
Digital assets and artificial intelligence
Developments related to digital assets
In October 2025, the Swiss Federal Council launched a consultation on proposed amendments to the Financial Institutions
Act aimed at improving the framework conditions for market development, the attractiveness of the Swiss financial center
and the integration of innovative financial technologies into the existing financial system. The proposal introduces two
new license categories: a payment instrument institution (PII) license, which would allow the holder to issue a 1:1-backed,
single currency regulated stablecoin; and a crypto-institution (CI) license to provide cryptocurrency services, including
staking, custody and trading. Under the proposal, banks would need to have a separate PII-licensed entity to issue a
regulated stablecoin. However, existing banking licenses would allow banks to conduct CI services. The Swiss Federal
Council plans to submit a draft bill to the Swiss Parliament, likely by the end of 2026. Separately, the Swiss Parliament
decided in November 2025 to postpone debate on the national implementation of the Crypto Asset Reporting Framework,
issued by the Organisation for Economic Co-operation and Development, pushing implementation beyond 2026. In
September 2025, FINMA issued guidance on the disclosure of crypto-based assets in the annual financial statements of
banks and securities firms.
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Our business model and environment | Regulatory and legal developments 24
In the US, the Guiding and Establishing National Innovation for US Stablecoins Act (the GENIUS Act) was signed into law
in July 2025, establishing a federal framework for stablecoin issuers. The banking agencies and the US Treasury are now
working to implement the law. In January 2025, a presidential executive order (an EO) was issued to promote the growth
and use of US digital assets. Federal agencies have taken some actions in response to the EO and the final report issued
following the EO, including the SEC rescinding its Staff Accounting Bulletin 121.
The Bank of England (the BoE) published a consultation in November 2025 on a regulatory framework for sterling-
denominated systemic stablecoins. The BoE sets out a proposed prudential and supervisory regime for non-bank issuers
of stablecoins deemed “systemic”. The final rules and supervisory approach are expected in the second half of 2026.
Developments related to artificial intelligence
In February 2025, the Swiss Federal Council decided on its approach to regulating artificial intelligence (AI) in Switzerland,
formally clarifying that a general cross-sector AI law will not be adopted. Under this approach, the Council of Europe’s
Framework Convention on Artificial Intelligence will be incorporated into Swiss law, and adjustments to existing laws
should be sector specific. Only key areas relevant to fundamental rights, such as data protection, will be subject to
general, cross-sectoral regulation. The government will draft a bill for consultation to implement the Framework
Convention on Artificial Intelligence by the end of 2026. Separately, non-legally binding measures will be proposed by
the end of 2026.
Risk factors
Certain risks, including those described below, may affect our ability to execute our strategy or our business activities,
financial condition, results of operations and prospects. We are inherently exposed to multiple risks, many of which may
become apparent only with the benefit of hindsight. As a result, risks that we do not consider to be material, or of which
we are not currently aware, could also adversely affect us. Within each category, the risks that we consider to be most
material are presented first.
Strategy, management and operational risks
Substantial changes in regulation may adversely affect our businesses and our ability to execute our strategic plans
We are subject to significant regulatory requirements, including capital and liquidity, legal structure requirements,
recovery and resolution planning, new and revised market standards and fiduciary duties, as well as new and developing
environmental, social and governance (ESG) standards and requirements. In addition, measures adopted or proposed for
banking and other regulation differ significantly across the major jurisdictions, making it increasingly difficult to manage
a global institution. Regulatory reviews of the events leading to the failures of US banks and the acquisition of Credit
Suisse by UBS Group AG in 2023, as well as regulatory measures to complete the implementation of the Basel III
standards, may increase capital, liquidity and other requirements applicable to banks, including UBS AG. Swiss regulatory
changes with regard to such matters as capital and liquidity have often proceeded more quickly than those in other major
jurisdictions, and Switzerland’s requirements for major international banks are among the strictest of the major financial
centers. Switzerland has implemented the final Basel III requirements effective 1 January 2025, while implementation in
other jurisdictions, including the United States, the EU and the UK, remains uncertain.
In June 2025, the Swiss Federal Council published for consultation proposed amendments to the Swiss Capital Adequacy
Ordinance. As currently proposed, such amendments would become effective in January 2027. In September 2025, the
Swiss Federal Council began a second public consultation on legislative amendments to capital requirements related to
foreign subsidiaries, which are intended to become effective in 2028, at the earliest, and are expected to be phased in
over a period of six to eight years. The Swiss Federal council is expected to publish for consultation, in the first half of
2026, the remainder of the legislative changes implementing the recommendations from the review. The capital measures
proposed by the Swiss Federal Council, if adopted as proposed, would require significant additional capital at UBS AG.
Increased capital or liquidity requirements would put us at a disadvantage when competing with peer financial institutions
subject to lower capital or liquidity requirements.
Our implementation of additional regulatory requirements and changes in supervisory standards, as well as our
compliance with existing laws and regulations, has entailed significant implementation and ongoing costs and continues
to receive heightened scrutiny from supervisors. If we do not meet supervisory expectations in relation to these or other
matters, or if additional supervisory or regulatory issues arise, we would likely be subject to further regulatory scrutiny, as
well as measures that may constrain our strategic flexibility.
Resolvability and resolution and recovery planning:
We have moved significant operations into subsidiaries to improve
resolvability and meet other regulatory requirements, and this has resulted in substantial implementation costs, increased
our capital and funding costs and reduced operational flexibility. For example, we have transferred all of our US
subsidiaries under a US intermediate holding company to meet US regulatory requirements and have transferred
substantially all the operations of Personal & Corporate Banking booked in Switzerland to UBS Switzerland AG to improve
resolvability.
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Our business model and environment | Risk factors 25
These changes create operational, capital, liquidity, funding and tax inefficiencies. Our operations in subsidiaries are
subject to local capital, liquidity, stable funding, capital planning and stress testing requirements. These requirements
have resulted in increased capital and liquidity requirements in affected subsidiaries, which limit our operational flexibility
and negatively affect our ability to benefit from synergies between business units and to distribute earnings to the Group.
Under the Swiss too-big-to-fail (TBTF) framework, we are required to put in place a viable emergency plan to preserve
the operation of systemically important functions in the event of a failure. Moreover, under this framework and similar
regulations in the US, the UK, the EU and other jurisdictions in which we operate, we are required to prepare credible
recovery and resolution plans detailing the measures that would be taken to recover in a significant adverse event or in
the event of winding down the Group, UBS AG or the operations in a host country through resolution or insolvency
proceedings. If a recovery or resolution plan that we produce is determined by the relevant authority to be inadequate or
not credible, relevant regulation may permit the authority to place limitations on the scope or size of our business in that
jurisdiction, or oblige us to hold higher amounts of capital or liquidity or to change our legal structure or business in order
to remove the relevant impediments to resolution.
The authorities in Switzerland and internationally have published lessons learned from the Credit Suisse and the US
regional bank failures, which are expected to result in additional requirements regarding recovery and resolution planning
as well as early intervention tools for authorities. In September 2025, FINMA published its 2025 resolution report on UBS
related to the 2024 fiscal year and FINMA concluded that UBS remains resolvable under UBS’s existing preferred resolution
strategy. However, given the lessons learned from the Credit Suisse crisis, FINMA also determined that the Swiss
emergency plan of UBS – although largely compliant with the current legal requirements – requires further development,
in particular better integration into UBS’s global resolution plan, to meet the objective of maintaining systemically
important functions while also safeguarding financial stability at the international level. Due to the ongoing integration
of Credit Suisse into UBS, FINMA has refrained from assessing UBS’s recovery plan, which outlines measures that aim to
restore financial strength if UBS should come under severe capital or liquidity stress. We expect to make adjustments to
our resolution plans to reflect additional guidance from FINMA and may be required to make further adjustments to
reflect any changes to law that are enacted.
Increases in capital and changes in liquidity requirements may, in the aggregate require us to maintain significantly higher
levels of capital, which may have an effect on our ability to achieve our strategic plans, to meet ambitions for return on
capital, and to achieve our ambitions for capital returns to shareholders. Significantly higher capital or liquidity
requirements applied to the UBS Group or UBS AG relative to competitors in Switzerland or abroad may affect UBS’s
ability to compete with firms subject to less stringent capital requirements and increase UBS’s costs to serve customers.
Market regulation and fiduciary standards:
Our businesses operate in an environment of increasing regulatory scrutiny
and changing standards with respect to fiduciary and other standards of care and the focus on mitigating or eliminating
conflicts of interest between a manager or advisor and the client, which require effective implementation across the
global systems and processes of investment managers and other industry participants. Future changes in the regulation
of our duties to customers, including any potential changes to banking examination and oversight practices and standards
as a result of interpretations of law, may require us to make further changes to our businesses, which would result in
additional expense and may adversely affect our business. We may also become subject to other similar regulations
substantively limiting the types of activities in which we may engage or the way we conduct our operations.
In many instances, we provide services on a cross-border basis, and we are therefore sensitive to barriers restricting market
access for third-country firms. In particular, efforts in the EU to harmonize the regime for third-country firms to access
the European market may have the effect of creating new barriers that adversely affect our ability to conduct business in
these jurisdictions from Switzerland. In addition, a number of jurisdictions are increasingly regulating cross-border
activities based on determinations of equivalence of home country regulation, substituted compliance or similar principles
of comity. A negative determination with respect to Swiss equivalence could limit our access to the market in those
jurisdictions and may negatively influence our ability to act as a global firm.
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Our business model and environment | Risk factors 26
UBS’s acquisition of Credit Suisse Group AG exposes UBS AG to heightened litigation risk and regulatory scrutiny and
entails significant additional costs, liabilities and business integration risks
UBS Group AG acquired Credit Suisse Group AG under exceptional circumstances and the continued outflows and
deteriorating overall financial position of Credit Suisse, in order to avert a failure of Credit Suisse and thus damage to the
Swiss financial center and to global financial stability. The acquisition was effected through a merger of Credit Suisse
Group AG with and into UBS Group AG, with UBS Group AG succeeding to all assets and all liabilities of Credit Suisse
Group AG, becoming the direct or indirect shareholder of the former Credit Suisse Group AG’s direct and indirect
subsidiaries. Therefore, on a consolidated basis, all assets, risks and liabilities of the Credit Suisse Group became a part
of UBS. This includes all ongoing and future litigation, regulatory and similar matters arising out of the business of the
Credit Suisse Group, thereby materially increasing UBS’s exposure to litigation and regulatory risks. UBS, including
UBS AG, has, and expects to continue to, incur substantial costs to manage and resolve litigation, regulatory and other
issues arising from Credit Suisse. In addition to the litigation and regulatory risks inherited from Credit Suisse Group AG,
various legal challenges to the acquisition transaction have been brought by former securityholders of Credit Suisse
Group AG. Former Credit Suisse shareholders have brought claims challenging the amount of merger consideration
received and seeking a valuation under the Swiss Merger Act. Former holders of Credit Suisse additional tier 1 capital
instruments have brought claims seeking a determination that FINMA’s order directing Credit Suisse Group AG to write
down such instruments was unauthorized and unlawful. In a partial ruling, the Swiss Federal Administrative Court has
ruled that FINMA’s order was unlawful without addressing any potential remedy. This ruling has been appealed by FINMA
and by UBS to the Swiss Federal Supreme Court. Although UBS believes these claims are without merit, a final adverse
decision in any of these matters could be material to UBS AG.
UBS AG has also incurred and expects to continue to incur costs to manage other issues arising from Credit Suisse. This
includes substantial resources in connection with our voluntary review of historical records relating to Credit Suisse’s
World War II-era conduct.
We have incurred and will continue to incur, substantial integration and restructuring costs as we combine the operations
of UBS and Credit Suisse. In addition, we may not realize all of the expected cost reductions and other benefits of the
transaction. We may not be able to successfully execute our strategic plans or to achieve the expected benefits of the
acquisition of the Credit Suisse Group. The success of the transaction, including anticipated benefits and cost savings,
will depend, in part, on the ability to successfully complete the integration of the operations of both firms rapidly and
effectively, while maintaining stability of operations and high levels of service to customers of the combined franchise.
Our ability to complete the integration of Credit Suisse will depend on a number of factors, some of which are outside
of our control, including our ability to:
–
combine the operations of the two firms in a manner that preserves client service, simplifies infrastructure and results
in operating cost savings, including successful completion of the transfer of clients from legacy Credit Suisse platforms
to UBS platforms in Switzerland, our largest booking center;
–
maintain deposits and client invested assets in our Global Wealth Management division and in Switzerland, and to
attract additional deposits and invested assets to the combined firm;
–
achieve cost reductions at the levels and in the timeframe we plan;
–
enhance, integrate and, where necessary, remediate risk management and financial control and other systems and
frameworks;
–
complete the simplification of the legal structure of the combined firm in an expedited manner, including obtaining
regulatory approvals and licenses required to implement these changes;
–
complete the wind-down of the assets and liabilities in our Non-core and Legacy division and release capital and
resources for other purposes;
–
decommission the information technology and other legacy Credit Suisse operational infrastructure to simplify our
infrastructure, reduce operational complexity and lower our operating expenses; and
–
resolve outstanding litigation, regulatory and similar matters, including matters relating to Credit Suisse, on terms that
are not significantly adverse to us, as well as to successfully remediate outstanding regulatory and supervisory matters
and meet other regulatory commitments.
The level of success in the absorption of Credit Suisse, in the integration of the two groups and their businesses, the
execution of cost reductions and divestment of non-core assets, as well as resulting impairments and write-downs, may
impact the operational results, share price and the credit rating of UBS entities. The combined Group will be required to
devote significant management attention and resources to integrating its business practices and support functions. The
diversion of management’s attention and any delays or difficulties encountered in connection with the transaction and
the coordination of the two companies’ operations could have an adverse effect on the business, financial results,
financial condition or the share price of the combined Group following the transaction.
Annual Report 2025 |
Our business model and environment | Risk factors 27
Our reputation is critical to our success
Our reputation is critical to the success of our strategic plans, business and prospects. Reputational damage is difficult to
reverse, and improvements tend to be slow and difficult to measure. In the past, our reputation has been adversely
affected by our losses during the 2008 financial crisis, investigations into our cross-border private banking services,
criminal resolutions of London Interbank Offered Rates (LIBOR)-related and foreign exchange matters, as well as other
matters. We believe that reputational damage as a result of these events was an important factor in our loss of clients
and client assets across our asset-gathering businesses. The Credit Suisse Group was more recently subject to significant
litigation and regulatory matters and to financial losses that adversely affected its reputation and the confidence of clients,
which played a significant role in the events leading to the acquisition of the Credit Suisse Group in March 2023. These
events, or new events that cause reputational damage, could have a material adverse effect on our results of operation
and financial condition, as well as our ability to achieve our strategic goals and financial targets.
Operational risks affect our business
Our businesses depend on our ability to process a large number of transactions, many of which are complex, across
multiple and diverse markets in different currencies, to comply with requirements of many different legal and regulatory
regimes to which we are subject and to prevent, or promptly detect and stop, unauthorized, fictitious or fraudulent
transactions. We also rely on access to, and on the functioning of, systems maintained by third parties, including clearing
systems, exchanges, information processors and central counterparties. Any failure of our or third-party systems could
have an adverse effect on us. These risks may be greater as we deploy newer technologies, such as blockchain, or
processes, platforms or products that rely on these technologies. Our operational risk management and control systems
and processes are designed to help ensure that the risks associated with our activities – including those arising from
process error, failed execution, misconduct, unauthorized trading, fraud, system failures, financial crime, cyberattacks,
breaches of information security, inadequate or ineffective access controls and failure of security and physical protection
– are appropriately controlled. If our internal controls fail or prove ineffective in identifying and remedying these risks,
we could suffer operational failures that might result in material losses. The acquisition of the Credit Suisse Group may
elevate these risks, particularly during the first phases of integration, as the firms have historically operated under different
procedures, IT systems, risk policies and structures of governance.
We use automation as part of our efforts to improve efficiency, reduce the risk of error and improve our client experience.
We intend to expand the use of robotic processing, machine learning and artificial intelligence (AI) to further these goals.
Use of these tools presents their own risks, including the need for effective design and testing; the quality of the data
used for development and operation of machine learning and AI tools may adversely affect their functioning and result
in errors and other operational risks.
Financial services firms have increasingly been subject to breaches of security and to cyber- and other forms of attack,
some of which are sophisticated and targeted attacks intended to gain access to confidential information or systems,
disrupt service or steal or destroy data, which may result in business disruption or the corruption or loss of data at
UBS AG’s locations or those of third parties. Cyberattacks by hackers, terrorists, criminal organizations, nation states and
extremists have also increased in frequency and sophistication. Current geopolitical tensions have also led to increased
risk of cyberattack from foreign state actors. In particular, the Russia–Ukraine war and the imposition of significant
sanctions on Russia by Switzerland, the US, the EU, the UK and others has resulted and may continue to result in an
increase in the risk of cyberattacks. Such attacks may occur on our own systems or on the systems that are operated by
external service providers, may be attempted through the introduction of ransomware, viruses or malware, phishing and
other forms of social engineering, distributed denial of service attacks and other means. These attempts may occur directly
or using equipment or security passwords of our employees, third-party service providers or other users. Cybersecurity
risks also have increased due to the widespread use of digital technologies, cloud computing and mobile devices to
conduct financial business and transactions, as well as due to generative AI, which increases the capabilities of adversaries
to mount sophisticated phishing attacks, for example, through the use of deepfake technologies, and presents new
challenges to the protection of our systems and networks and the confidentiality and integrity of our data. In addition to
external attacks, we have experienced loss of client data from failure by employees and others to follow internal policies
and procedures and from misappropriation of our data by employees and others.
We may not be able to anticipate, detect or recognize threats to our systems or data and our preventative measures may
not be effective to prevent an attack or a security breach. In the event of a security breach, notwithstanding our
preventative measures, we may not immediately detect a particular breach or attack. The acquisition of the Credit Suisse
Group may elevate and intensify these risks, as would-be attackers have a larger potential target in the combined bank
and differences in systems, policies, and platforms could make threat detection more difficult. In addition, the
implementation of the large-scale technological change program that is necessary to integrate the combined bank’s
systems at pace may also result in increased risks. Once a particular attack is detected, time may be required to investigate
and assess the nature and extent of the attack, and to restore and test systems and data. If a successful attack occurs at
a service provider, as we have recently experienced, we may be dependent on the service provider’s ability to detect the
attack, investigate and assess the attack and successfully restore the relevant systems and data. A successful breach or
circumvention of security of our or a service provider’s systems or data could have significant negative consequences for
us, including disruption of our operations, misappropriation of confidential information concerning us or our clients,
damage to our systems, financial losses for us or our clients, violations of data privacy and similar laws, litigation exposure,
and damage to our reputation. We may be subject to enforcement actions as regulatory focus on cybersecurity increases
and regulators have announced new rules, guidance and initiatives on ransomware and other cybersecurity-related issues.
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Our business model and environment | Risk factors 28
We are subject to complex and frequently changing laws and regulations governing the protection of client and personal
data, such as the EU General Data Protection Regulation. Ensuring that we comply with applicable laws and regulations
when we collect, use and transfer personal information requires substantial resources and may affect the ways in which
we conduct our business. In the event that we fail to comply with applicable laws, we may be exposed to regulatory fines
and penalties and other sanctions. We may also incur such penalties if our vendors or other service providers or clients
or counterparties fail to comply with these laws or to maintain appropriate controls over protected data. In addition, any
loss or exposure of client or other data may adversely damage our reputation and adversely affect our business.
A major focus of US and other countries’ governmental policies relating to financial institutions in recent years has been
on fighting money laundering and terrorist financing. We are required to maintain effective policies, procedures and
controls to detect, prevent and report money laundering and terrorist financing, and to verify the identity of our clients
under the laws of many of the countries in which we operate. We are also subject to laws and regulations related to
corrupt and illegal payments to government officials by others, such as the US Foreign Corrupt Practices Act and the UK
Bribery Act. We have implemented policies, procedures and internal controls that are designed to comply with such laws
and regulations. Failure to maintain and implement adequate programs to combat money laundering, terrorist financing
or corruption, or any failure of our programs in these areas, could have serious consequences both from legal
enforcement action and from damage to our reputation. Frequent changes in sanctions imposed and increasingly
complex sanctions imposed on countries, entities and individuals, as exemplified by the breadth and scope of the
sanctions imposed in relation to the war in Ukraine, increase our cost of monitoring and complying with sanctions
requirements and increase the risk that we will not identify in a timely manner client activity that is subject to a sanction.
As a result of new and changed regulatory requirements and the changes we have made in our legal structure, the
volume, frequency and complexity of our regulatory and other reporting has remained elevated. Regulators have also
significantly increased expectations regarding our internal reporting and data aggregation, as well as management
reporting. We have incurred, and continue to incur, significant costs to implement infrastructure to meet these
requirements. Failure to meet external reporting requirements accurately and in a timely manner or failure to meet
regulatory expectations of internal reporting, data aggregation and management reporting could result in enforcement
action or other adverse consequences for us.
In addition, despite the contingency plans that we have in place, our ability to conduct business may be adversely affected
by a disruption in the infrastructure that supports our businesses and the communities in which we operate. This may
include a disruption due to natural disasters, pandemics, civil unrest, war or terrorism and involve electrical,
communications, transportation or other services that we use or that are used by third parties with whom we conduct
business.
We depend on our risk management and control processes to avoid or limit potential losses in our businesses
Controlled risk-taking is a major part of the business of a financial services firm. Some losses from risk-taking activities
are inevitable, but, to be successful over time, we must balance the risks we take against the returns generated. Therefore,
we must diligently identify, assess, manage and control our risks, not only in normal market conditions but also as they
might develop under more extreme, stressed conditions, when concentrations of exposures can lead to severe losses.
We have not always been able to prevent serious losses arising from risk management failures and extreme or sudden
market events. We recorded substantial losses on fixed-income trading positions in the 2008 financial crisis, in the
unauthorized trading incident in 2011 and, more recently, positions resulting from the default of a US prime brokerage
client. Credit Suisse has suffered very significant losses from the default of the US prime brokerage client and losses in
supply chain finance funds managed by it, as well as other matters.
We regularly revise and strengthen our risk management and control frameworks to seek to address identified
shortcomings. Nonetheless, we could suffer further losses in the future if, for example:
–
we do not fully identify the risks in our portfolio, in particular risk concentrations and correlated risks;
–
our assessment of the risks identified, or our response to negative trends, proves to be untimely, inadequate,
insufficient or incorrect;
–
our risk models prove insufficient to predict the scale of financial risks the bank faces;
–
markets move in ways that we do not expect – in terms of their speed, direction, severity or correlation – and our
ability to manage risks in the resulting environment is, therefore, affected;
–
third parties to whom we have credit exposure or whose securities we hold are severely affected by events and we
suffer defaults and impairments beyond the level implied by our risk assessment; or
–
collateral or other security provided by our counterparties and clients proves inadequate to cover their obligations at
the time of default.
We also hold legacy risk positions, primarily in Non-core and Legacy, that, in many cases, are illiquid and may deteriorate
in value. The acquisition of the Credit Suisse Group and the integration of UBS AG with Credit Suisse AG have increased,
materially, the portfolio of business that is outside of our risk appetite and subject to exit in the Non-core and Legacy
segment.
We also manage risk on behalf of our clients. The performance of assets we hold for our clients may be adversely affected
by the aforementioned factors. If clients suffer losses or the performance of their assets held with us is not in line with
relevant benchmarks against which clients assess investment performance, we may suffer reduced fee income and a
decline in assets under management, or withdrawal of mandates.
Annual Report 2025 |
Our business model and environment | Risk factors 29
Investment positions, such as equity investments made as part of strategic initiatives and seed investments made at the
inception of funds that we manage, may also be affected by market risk factors. These investments are often not liquid
and generally are intended or required to be held beyond a normal trading horizon. Deteriorations in the fair value of
these positions would have a negative effect on our earnings.
We may be unable to identify or capture revenue or competitive opportunities, or retain and attract qualified
employees
The financial services industry is characterized by intense competition, continuous innovation, restrictive, detailed and
sometimes fragmented regulation and ongoing consolidation. We face competition at the level of local markets and
individual business lines and from global financial institutions that are comparable to us in their size and breadth, as well
as competition from new technology-based market entrants, which may not be subject to the same level of regulation.
Barriers to entry in individual markets and pricing levels are being eroded by new technology. We expect these trends to
continue and competition to increase. Our competitive strength and market position could be eroded if we are unable
to identify market trends and developments, do not respond to such trends and developments by devising and
implementing adequate business strategies, do not adequately develop or update our technology, including our digital
channels and tools and deployment of artificial intelligence, or are unable to attract or retain the qualified people needed.
The amount and structure of our employee compensation is affected not only by our business results but also by
competitive factors and regulatory considerations.
In response to the demands of various stakeholders, including regulatory authorities and shareholders, and in order to
better align the interests of our staff with other stakeholders, our compensation framework includes deferral periods for
stock awards, forfeiture provisions and clawback provisions for certain awards linked to business performance. We also
have individual caps on the proportion of fixed to variable pay for the members of the Executive Board (EB), as well as
certain other employees. UBS is also required to maintain and enforce provisions requiring UBS to recover from EB
members a portion of performance-based incentive compensation in the event that the UBS Group and UBS AG, or
another entity with securities listed on a US national securities exchange, is required to restate its financial statements as
a result of a material error.
Constraints on the amount or structure of employee compensation, high levels of deferral, performance conditions and
other circumstances triggering the forfeiture of unvested awards may adversely affect our ability to retain and attract key
employees, particularly where we compete with companies that are not subject to these constraints. The loss of key staff
and the inability to attract qualified replacements could seriously compromise our ability to execute our strategy and to
successfully improve our operating and control environment, and could affect our business performance. Swiss law
requires that shareholders approve the compensation of the Board of Directors of UBS Group AG (the Group BoD) and
the Group Executive Board (GEB) each year. If UBS Group AG’s shareholders fail to approve the compensation for the
GEB or the Group BoD, this could have an adverse effect on our ability to retain experienced directors and our senior
management.
Our operating results, financial condition and ability to pay our obligations in the future may be affected by funding,
dividends and other distributions received directly or indirectly from subsidiaries, which may be subject to restrictions
UBS AG’s ability to pay its obligations in the future will depend on the level of funding, dividends and other distributions,
if any, received from UBS Switzerland AG and other subsidiaries. The ability of such subsidiaries to make loans or
distributions, directly or indirectly, to UBS AG may be restricted as a result of several factors, including restrictions in
financing agreements and the requirements of applicable law and regulatory, fiscal or other restrictions. In particular,
UBS AG’s direct and indirect subsidiaries, including UBS Switzerland AG, UBS Americas Holding LLC, UBS Europe SE and
Credit Suisse International, are subject to laws and regulations that require the entities to maintain minimum levels of
capital and liquidity, that restrict dividend payments, that authorize regulatory bodies to block or reduce the flow of
funds from those subsidiaries to UBS AG or that could affect their ability to repay any loans made to, or other investments
in, such subsidiary by UBS AG or another member of the Group. Restrictions and regulatory actions could impede access
to funds that UBS AG may need to meet its obligations, to pay dividends to shareholders or to repurchase our shares. In
addition, UBS AG’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is
subject to all prior claims of the subsidiary’s creditors.
Furthermore, UBS AG may guarantee some of the payment obligations of certain of the Group’s subsidiaries from time
to time. These guarantees may require UBS AG to provide substantial funds or assets to subsidiaries or their creditors or
counterparties at a time when UBS AG is in need of liquidity to fund its own obligations.
Market, credit and macroeconomic risks
Performance in the financial services industry is affected by market conditions and the macroeconomic climate
Our businesses are materially affected by market and macroeconomic conditions. A market downturn and weak
macroeconomic conditions can be precipitated by a number of factors, including geopolitical events, such as international
armed conflicts, war, or acts of terrorism, the imposition of sanctions, global trade or global supply chain disruptions,
including energy shortages and food insecurity, changes in monetary or fiscal policy, changes in trade policies or
international trade disputes, significant inflationary or deflationary price changes, disruptions in one or more concentrated
economic sectors, natural disasters, pandemics or local and regional civil unrest. Such developments can have
unpredictable and destabilizing effects.
Annual Report 2025 |
Our business model and environment | Risk factors 30
Adverse changes in interest rates, credit spreads, securities prices, market volatility and liquidity, foreign exchange rates,
commodity prices, and other market fluctuations, as well as changes in investor sentiment, can affect our earnings and
ultimately our financial and capital positions. As financial markets are global and highly interconnected, local and regional
events can have widespread effects well beyond the countries in which they occur. Any of these developments may
adversely affect our business or financial results.
In periods of significant market volatility, our businesses may experience a decrease in client activity levels and market
volumes, which would adversely affect our ability to generate transaction fees and commissions, particularly in Global
Wealth Management and the Investment Bank. A market downturn would likely reduce the volume and valuation of
assets that we manage on behalf of clients, which would reduce recurring fee income that is charged based on invested
assets, primarily in Global Wealth Management and Asset Management. Such a downturn could also cause a decline in
the value of assets that we own and account for as investments or trading positions. In addition, reduced market liquidity
or volatility may limit trading opportunities and therefore may reduce transaction-based income and may also impede
our ability to manage risks.
Health emergencies, including pandemics and measures taken by governmental authorities to manage them, may have
effects such as labor market displacements, supply chain disruptions, and inflationary pressures, and adversely affect
global and regional economic conditions, resulting in contraction in the global economy, substantial volatility in the
financial markets, crises in markets for goods and services, disruptions in real estate markets, increased unemployment,
increased credit and counterparty risk, and operational challenges, as we saw with the COVID-19 pandemic. Such
economic or market disruptions, including inflationary pressures, may lead to reduced levels of client activity and demand
for our products and services, increased utilization of lending commitments, significantly increased client defaults,
continued and increasing credit and valuation losses in our loan portfolios, loan commitments and other assets, and
impairments of other financial assets.
Geopolitical events:
geopolitical events may have significant impacts on global markets, exacerbate global inflationary pressures and slow
global growth. In addition, the ongoing conflicts and other events may continue to cause significant population
displacement, and lead to shortages of vital commodities, including energy shortages or significantly higher energy prices
and food insecurity outside the areas immediately involved in armed conflict. Governmental responses to armed conflicts,
including, with respect to the Russia–Ukraine war, coordinated successive sets of sanctions on Russia and Belarus, and
Russian and Belarusian entities and nationals, and the uncertainty as to whether the ongoing conflicts will widen and
intensify, may continue to have significant adverse effects on the market and macroeconomic conditions, including in
ways that cannot be anticipated. If individual countries impose restrictions on cross-border payments or trade, or other
exchange or capital controls, or change their currency, we could suffer adverse effects on our business, losses from
enforced default by counterparties, be unable to access our own assets or be unable to effectively manage our risks.
We could be materially affected if a crisis develops, regionally or globally, as a result of disruptions in markets due to
macroeconomic or political developments, trade restrictions, or the failure of a major market participant. Over time, our
strategic plans have become more heavily dependent on our ability to generate growth and revenue in emerging markets,
including China, causing us to be more exposed to the risks associated with such markets.
Global Wealth Management derives revenues from all the principal regions but has a greater concentration in Asia than
many peers and a substantial presence in the US, unlike many European peers. The Investment Bank’s business is more
heavily weighted to Europe and Asia than our peers, while its derivatives business is more heavily weighted to structured
products for wealth management clients, in particular with European and Asian underlyings. Our performance may
therefore be more affected by political, economic and market developments in these regions and businesses than some
other financial service providers.
The extent to which ongoing conflicts, current inflationary pressures and related adverse economic conditions affect our
businesses, results of operations and financial condition, as well as our regulatory capital and liquidity ratios, will depend
on future developments, including the effects of the current conditions on our clients, counterparties, employees and
third-party service providers.
Annual Report 2025 |
Our business model and environment | Risk factors 31
Our credit risk exposure to clients, trading counterparties and other financial institutions would increase under adverse
or other economic conditions
Credit risk is an integral part of many of our activities, including lending, underwriting and derivatives activities. Adverse
economic or market conditions, or the imposition of sanctions or other restrictions on clients, counterparties or financial
institutions, may lead to impairments and defaults on these credit exposures. Losses may be exacerbated by declines in
the value of collateral securing loans and other exposures. In our prime brokerage, securities finance and Lombard lending
businesses, we extend substantial amounts of credit against securities collateral the value or liquidity of which may decline
rapidly. Market closures and the imposition of exchange controls, sanctions or other measures may limit our ability to
settle existing transactions or to realize on collateral, which may result in unexpected increases in exposures. Our Swiss
mortgage and corporate lending portfolios are a large part of our overall lending. We are therefore exposed to the risk
of adverse economic developments in Switzerland, including property valuations in the housing market, the strength of
the Swiss franc and its effect on Swiss exports, low or negative interest rates applied by the Swiss National Bank, economic
conditions within the Eurozone or the EU, and the evolution of agreements between Switzerland and the EU or European
Economic Area, which represent Switzerland’s largest export market. Although we believe this portfolio is prudently
managed, we could nevertheless be exposed to losses if a substantial deterioration in the Swiss real estate market were
to occur.
As we experienced in 2020, under the IFRS 9 expected credit loss (ECL) regime, credit loss expenses may increase rapidly
at the onset of an economic downturn as a result of higher levels of credit impairments (stage 3), as well as higher ECL
from stages 1 and 2. Substantial increases in ECL could exceed expected loss for regulatory capital purposes and adversely
affect our common equity tier 1 (CET1) capital and regulatory capital ratios.
Interest rate trends and changes could negatively affect our financial results
UBS’s businesses are sensitive to changes in interest rate trends. A prolonged period of low or negative interest rates,
particularly in Switzerland and the Eurozone, adversely affected the net interest income generated by UBS’s Personal &
Corporate Banking and Global Wealth Management businesses prior to 2022. The return to a zero policy rate by the
Swiss National Bank in 2025 has and, UBS AG expects, will continue to adversely affect our net interest income. Actions
that UBS took in the 2022 period to mitigate adverse effects on income, such as the introduction of selective deposit
fees or minimum lending rates, contributed to outflows of customer deposits, net new money outflows and a declining
market share in its Swiss lending business.
Higher interest rates generally benefit UBS AG’s net interest income. When interest rates increase substantially, returns
on alternatives to deposits, such as returns on money market funds, may increase relative to deposit rates, leading to
outflows of customer deposits and shifts of deposits from lower-interest account types to higher interest products, such
as savings and certificates of deposit. Customer deposit outflows could require UBS AG to obtain alternative funding,
which would likely be more costly than customer deposits.
Currency
fluctuation may have an adverse effect on our profits, balance sheet and regulatory capital
We are subject to currency fluctuation risks as a substantial portion of our assets and liabilities are denominated in
currencies other than UBS AG’s presentation currency, the US dollar. In order to hedge our CET1 capital ratio, our CET1
capital must have foreign currency exposure, which leads to currency sensitivity. As a consequence, it is not possible to
simultaneously fully hedge both CET1 capital and the CET1 capital ratio. Accordingly, changes in foreign exchange rates
may adversely affect our profits, balance sheet, and capital, leverage and liquidity coverage ratios. During 2025, the US
dollar materially depreciated against other major currencies, including the Swiss franc and the euro. This depreciation
resulted in an increase of the US dollar value of assets denominated in other currencies reflected on our balance sheet,
increasing our leverage ratio denominator.
Regulatory and legal risks
Material legal and regulatory risks arise in the conduct of our business
As a global financial services firm operating in more than 50 countries, we are subject to many different legal, tax and
regulatory regimes, including extensive regulatory oversight, and are exposed to significant liability risk. We are subject
to a large number of claims, disputes, legal proceedings and government investigations, and we expect that our ongoing
business activities will continue to give rise to such matters in the future. In addition, UBS inherited claims against Credit
Suisse entities as part of the acquisition, including matters that may be material to the operating results of the combined
Group. The extent of our financial exposure to these and other matters is material and could substantially exceed the
level of provisions that we have established. We are not able to predict the financial and non-financial consequences
these matters may have when resolved.
We may be subject to adverse preliminary determinations or court decisions that may negatively affect public perception
and our reputation, result in prudential actions from regulators, and cause us to record additional provisions for such
matters even when we believe we have substantial defenses and expect to ultimately achieve a more favorable outcome.
This risk is illustrated by the award of aggregate penalties and damages of EUR 4.5bn against UBS by the court of first
instance in France. This award was reduced to an aggregate of EUR 1.8bn by the Court of Appeal, and, in a further
appeal, the French Supreme Court referred the case back to the Paris Court of Appeal to reconsider the amount after a
new trial. Ultimately, the case was resolved in September 2025 and UBS AG agreed to pay a fine of EUR 730m and
EUR 105m in civil damages to the French State.
Annual Report 2025 |
Our business model and environment | Risk factors 32
Litigation, regulatory and similar matters may also result in non-monetary penalties and consequences. Among other
things, a guilty plea to, or conviction of, a crime (including as a result of termination of the Deferred Prosecution
Agreement Credit Suisse entered into with the US Department of Justice in 2021 to resolve its Mozambique matter) could
have material consequences for UBS.
Resolution of regulatory proceedings has required us to obtain waivers of regulatory disqualifications to maintain certain
operations, may entitle regulatory authorities to limit, suspend or terminate licenses and regulatory authorizations, and
may permit financial market utilities to limit, suspend or terminate our participation in them. UBS and Credit Suisse have
each required waivers or exemptions in order to continue to act as investment manager to pension plans and registered
investment companies in the US, among other things; failure to obtain such waivers, or any limitation, suspension or
termination of licenses, authorizations or participations arising from a disqualifying event, could have material adverse
consequences for us.
Our settlements with governmental authorities in connection with foreign exchange, LIBOR and other benchmark interest
rates starkly illustrate the significantly increased level of financial and reputational risk now associated with regulatory
matters in major jurisdictions. In connection with investigations related to LIBOR and other benchmark rates, and to
foreign exchange and precious metals, very large fines and disgorgement amounts were assessed against us, and we
were required to enter guilty pleas despite our full cooperation with the authorities in the investigations and despite our
receipt of conditional leniency or conditional immunity from anti-trust authorities in a number of jurisdictions, including
the US and Switzerland.
For a number of years, we have been, and we continue to be, subject to a very high level of regulatory scrutiny. We
believe we have remediated the deficiencies that led to significant losses in the past and made substantial changes in our
controls and conduct risk frameworks to address the issues highlighted by past regulatory resolutions. We have also
undertaken extensive efforts to implement new regulatory requirements and meet heightened supervisory expectations.
Prior to its acquisition by UBS, Credit Suisse was also subject to a high level of regulatory scrutiny and had significant
regulatory and other remediation programs to address identified issues, including as a result of the Archegos,
Mozambique, supply chain finance and cross-border tax matters. As part of the integration of Credit Suisse, UBS is
addressing these matters and will likely remain under additional regulatory scrutiny until the integration is substantially
completed.
We continue to be in active dialogue with regulators concerning the actions we are taking to improve our operational
risk management, risk control, anti-money-laundering, data management and other frameworks, and otherwise seek to
meet supervisory expectations, but there can be no assurance that our efforts will have the desired effects. As a result of
this history, our level of risk with respect to regulatory enforcement may be greater than that of some of our peers.
If we experience severe financial difficulties, FINMA has the power to open restructuring or liquidation proceedings or
impose protective measures in relation to UBS Group AG, UBS AG or UBS Switzerland AG, and such proceedings or
measures may have a material adverse effect on our creditors
Under the Swiss Banking Act, FINMA is able to exercise broad statutory powers with respect to Swiss banks and Swiss
parent companies of financial groups, such as UBS Group AG, UBS AG and UBS Switzerland AG, if there is justified
concern that an entity is over-indebted, has serious liquidity problems or, after the expiration of any relevant deadline,
no longer fulfills capital adequacy requirements. Such powers include ordering protective measures, instituting
restructuring proceedings (and exercising any Swiss resolution powers in connection therewith), and instituting
liquidation proceedings, all of which may have a material adverse effect on shareholders and creditors or may prevent
UBS AG or UBS Switzerland AG from paying dividends or making payments on debt obligations.
UBS would have limited ability to challenge any such protective measures, and creditors and shareholders would also
have limited ability under Swiss law or in Swiss courts to reject them, seek their suspension, or challenge their imposition,
including measures that require or result in the deferment of payments.
If restructuring proceedings are opened with respect to UBS Group AG, UBS AG or UBS Switzerland AG the resolution
powers that FINMA may exercise include the power to: (i) transfer all or some of the assets, debt and other liabilities, and
contracts of the entity subject to proceedings to another entity; (ii) stay for a maximum of two business days (a) the
termination of, or the exercise of rights to terminate, netting rights, (b) rights to enforce or dispose of certain types of
collateral or (c) rights to transfer claims, liabilities or certain collateral, under contracts to which the entity subject to
proceedings is a party; and (iii) partially or fully write down the equity capital and regulatory capital instruments, including
UBS Group senior debt and additional tier 1 capital instruments, and, if such regulatory capital is fully written down, write
down or convert into equity the other debt instruments of the entity subject to proceedings. Creditors would have no
right to reject, or to seek the suspension of, any restructuring plan pursuant to which such resolution powers are
exercised. They would have only limited rights to challenge any decision to exercise resolution powers or to have that
decision reviewed by a judicial or administrative process or otherwise.
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Our business model and environment | Risk factors 33
Upon full or partial write-down of the equity and regulatory capital instruments of the entity subject to restructuring
proceedings, the relevant creditors would receive no payment in respect of the equity and debt that is written down, the
write-down would be permanent, and the investors would likely not, at such time or at any time thereafter, receive any
shares or other participation rights, or be entitled to any write-up or any other compensation in the event of a potential
subsequent recovery of the debtor. If FINMA orders the conversion of debt of the entity subject to restructuring
proceedings into equity, the securities received by the investors may be worth significantly less than the original debt and
may have a significantly different risk profile. In addition, creditors receiving equity would be effectively subordinated to
all creditors of the restructured entity in the event of a subsequent winding up, liquidation or dissolution of the
restructured entity, which would increase the risk that investors would lose all or some of their investment.
FINMA has significant discretion in the exercise of its powers in connection with restructuring proceedings. Furthermore,
certain categories of debt obligations, such as certain types of deposits, are subject to preferential treatment. As a result,
holders of obligations of an entity subject to a Swiss restructuring proceeding may have their obligations written down
or converted into equity even though obligations ranking on par with such obligations are not written down or converted.
Developments in sustainability, climate, environmental and social standards and regulations may affect our business and
impact our ability to fully realize our goals
We are subject to separate, and sometimes conflicting, ESG regulations and regulator expectations in the various
jurisdictions in which UBS AG operates. For example, in certain jurisdictions, we are required to set diversity targets or
other ESG-related goals that are considered illegal or contrary to regulatory expectations in other jurisdictions. In addition,
with respect to decarbonization mandates, there is substantial uncertainty as to the scope of actions that may be required
of us, governments and others to achieve the goals we have set, and many of our goals and objectives are only achievable
with a combination of government and private action. National and international standards and expectations, industry
and scientific practices, regulatory taxonomies, and disclosure obligations addressing these matters are relatively
immature and are rapidly evolving. In addition, there are significant limitations in the data available to measure our
climate and other goals. Although we have defined and disclosed our goals based on the standards existing at the time
of disclosure, there can be no assurance (i) that the various ESG regulatory and disclosure regimes under which we
operate will not come into further conflict with one another, (ii) that the current standards will not be interpreted
differently than our understanding or change in a manner that substantially increases the cost or effort for us to achieve
such goals or (iii) that additional data or methods, whether voluntary or required by regulation, may substantially change
our calculation of our goals and ambitions. It is possible that such goals may prove to be considerably more difficult or
even impossible to achieve. The evolving standards may also require us to substantially change the stated goals and
ambitions. If we are not able to achieve the goals we have set, or can only do so at significant expense to our business,
we may fail to meet regulatory expectations, incur damage to our reputation or be exposed to an increased risk of
litigation or other adverse action.
While ESG regulatory regimes and international standards are being developed, including to require consideration of ESG
risks in investment decisions, some jurisdictions, notably in the US, have developed rules restricting the consideration of
ESG factors in investment and business decisions. Under these anti-ESG rules, companies that are perceived as boycotting
or discriminating against certain industries may be restricted from doing business with certain governmental entities. Our
businesses may be adversely affected if we are considered as discriminating against companies based on ESG
considerations, or if further anti-ESG rules are developed or broadened.
Our financial results may be negatively affected by changes to assumptions and valuations, as well as changes to
accounting standards
We prepare our consolidated financial statements in accordance with IFRS Accounting Standards. The application of
these accounting standards requires the use of judgment based on estimates and assumptions that may involve significant
uncertainty at the time they are made. This is the case, for example, with respect to the measurement of fair value of
financial instruments, the recognition of deferred tax assets (DTAs), the assessment of the impairment of goodwill,
expected credit losses and estimation of provisions for litigation, regulatory and similar matters. Such judgments,
including the underlying estimates and assumptions, which encompass historical experience, expectations of the future
and other factors, are regularly evaluated to determine their continuing relevance based on current conditions. Using
different assumptions could cause the reported results to differ. Changes in assumptions, or failure to make the changes
necessary to reflect evolving market conditions, may have a significant effect on the financial statements in the periods
when changes occur. Estimates of provisions may be subject to a wide range of potential outcomes and significant
uncertainty. For example, the broad range of potential outcomes in our legal proceedings in France and in a number of
Credit Suisse’s legal proceedings increase the uncertainty associated with assessing the appropriate provision. If the
estimates and assumptions in future periods deviate from the current outlook, our financial results may also be negatively
affected.
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Our business model and environment | Risk factors 34
Changes to IFRS Accounting Standards or interpretations thereof may cause future reported results and financial positions
to differ from current expectations, or historical results to differ from those previously reported due to the adoption of
accounting standards on a retrospective basis. Such changes may also affect our regulatory capital and ratios. For
example, the introduction of the ECL regime under IFRS 9 in 2018 fundamentally changed how credit risk arising from
loans, loan commitments, guarantees and certain revocable facilities is accounted for. Under the ECL regime, credit loss
expenses may increase rapidly at the onset of an economic downturn as a result of higher levels of credit impairments
(stage 3), as well as higher ECL from stages 1 and 2, only gradually diminishing once the economic outlook improves. As
we observed in 2020, this effect may be more pronounced in a deteriorating economic environment. Substantial increases
in ECL could exceed expected loss for regulatory capital purposes and adversely affect our CET1 capital and regulatory
capital ratios.
We may be unable to maintain our capital strength
Capital strength enables us to grow our businesses and absorb increases in regulatory and capital requirements. Our
ability to maintain our capital ratios is subject to numerous risks, including the financial results of our businesses, the
effect of changes to capital standards, methodologies and interpretations that may adversely affect the calculation of our
capital ratios, the imposition of risk add-ons or capital buffers, and the application of additional capital, liquidity and
similar requirements to subsidiaries. Our capital and leverage ratios are driven primarily by RWA, LRD and eligible capital,
all of which may fluctuate based on a number of factors, some of which are outside of our control. The results of our
businesses may be adversely affected by events arising from other risk factors described herein. In some cases, such as
litigation and regulatory risk and operational risk events, losses may be sudden and large.
Our eligible capital may be reduced by losses recognized within net profit or other comprehensive income. Eligible capital
may also be reduced for other reasons, including acquisitions that change the level of goodwill, changes in temporary
differences related to DTAs included in capital, adverse currency movements affecting the value of equity, prudential
adjustments that may be required due to the valuation uncertainty associated with certain types of positions, changes in
regulatory interpretations on the inclusion or exclusion of items contributing to our shareholders
’
capital, and changes in the value of certain pension fund assets and liabilities or in the interest rate and other assumptions
used to calculate the changes in our net defined benefit obligation recognized in other comprehensive income.
RWA are driven by our business activities, by changes in the risk profile of our exposures, by changes in our foreign
currency exposures and foreign exchange rates, and by regulation. For instance, substantial market volatility, a widening
of credit spreads, adverse currency movements, increased counterparty risk, deterioration in the economic environment
or increased operational risk could result in an increase in RWA. Changes in the calculation of RWA, the imposition of
additional supplemental RWA charges or multipliers applied to certain exposures and other methodology changes, as
well as the finalization of the Basel III framework and Fundamental Review of the Trading Book promulgated by the BCBS,
which are expected to affect our RWA.
The leverage ratio is a balance sheet-driven measure and therefore limits balance sheet-intensive activities, such as
lending, more than activities that are less balance sheet intensive, and it may constrain our business even if we satisfy
other risk-based capital requirements. Our LRD is driven by, among other things, the level of client activity, including
deposits and loans, foreign exchange rates, interest rates, other market factors and changes in required liquidity. Many
of these factors are wholly or partly outside of our control.
The effect of taxes on our financial results is significantly influenced by changes in tax law, or reinterpretations of
existing laws by courts or tax authorities, reassessments of our deferred tax assets and operating losses of certain
entities with no associated tax benefit
Our effective tax rate is highly sensitive to our performance, our expectation of future profitability and any potential
increases or decreases in statutory tax rates, such as any potential increase or decrease in the US federal corporate tax
rate, and changes in the interpretation of tax law. Furthermore, based on prior years’ tax losses and deductible temporary
differences, we have recognized DTAs reflecting the probable recoverable level based on future taxable profit as informed
by our business plans. If our performance is expected to produce diminished taxable profit in future years, particularly in
the US, we may be required to write down all or a portion of the currently recognized DTAs through the income statement
in excess of anticipated amortization. This would have the effect of increasing our effective tax rate in the year in which
any write-downs are taken. Conversely, if we expect the performance of entities in which we have unrecognized tax
losses to improve, particularly in the US or the UK, we could potentially recognize additional DTAs. The effect of doing
so would be to reduce our effective tax rate in years in which additional DTAs are recognized and to increase our effective
tax rate in future years. Our effective tax rate is also sensitive to any future reductions in statutory tax rates, particularly
in the US, which would cause the expected future tax benefit from items such as tax loss carry-forwards in the affected
locations to diminish in value. This, in turn, would cause a write-down of the associated DTAs. Conversely, an increase
in US corporate tax rates would result in an increase in the Group’s recognized DTAs.
Changes in tax law may materially affect our effective tax rate and, in some cases, may substantially affect the profitability
of certain activities. In addition, statutory and regulatory changes, as well as changes to the way in which courts and tax
authorities interpret tax laws, including assertions that we are required to pay taxes in a jurisdiction as a result of activities
connected to that jurisdiction constituting a permanent establishment or similar theory, and changes in our assessment
of uncertain tax positions, could cause the amount of taxes we ultimately pay to materially differ from the amount
accrued.
Annual Report 2025 |
Our business model and environment | Risk factors 35
We may incur material future tax liabilities in connection with the combination with Credit Suisse
In the past, the Credit Suisse Group has recorded significant impairments of the tax value of its participations in
subsidiaries below their tax acquisition costs. Following the acquisition of the Credit Suisse Group and the subsequent
combination of Credit Suisse AG with UBS AG, tax acquisition costs of certain participations held by Credit Suisse
Group AG and its subsidiaries have been transferred to the UBS AG Group. UBS Group AG and its subsidiaries may
become subject to additional Swiss tax on future reversals of such impairments for Swiss tax purposes. Reversals of prior
impairments may occur to the extent that the net asset value of the previously impaired subsidiary increases, e.g. as a
result of an increase in retained earnings. Although it is difficult to quantify this additional future tax exposure, as various
potential mitigants (e.g. transfers of assets and liabilities, business activities, subsidiary investments, as well as other
restructuring measures within the combined Group in the course of the integration) exist, it may be material.
Liquidity and funding risk
Liquidity and funding management are critical to UBS AG’s ongoing performance
The viability of our business depends on the availability of funding sources, and our success depends on our ability to
obtain funding at times, in amounts, for tenors and at rates that enable us to efficiently support our asset base in all
market conditions. Our funding sources have generally been stable, but could change in the future because of, among
other things, general market disruptions or widening credit spreads, which could also influence the cost of funding. A
substantial part of our liquidity and funding requirements are met using short-term unsecured funding sources, including
retail and wholesale deposits and the regular issuance of money market securities. A change in the availability of short-
term funding could occur quickly.
Reductions in our credit ratings may adversely affect the market value of the securities and other obligations and increase
our funding costs, in particular with regard to funding from wholesale unsecured sources, and could affect the availability
of certain kinds of funding. In addition, as experienced in connection with the Moody’s Investors Service Ltd. downgrade
of UBS AG’s long-term debt rating in June 2012, rating downgrades can require us to post additional collateral or make
additional cash payments under trading agreements. Our credit ratings, together with our capital strength and
reputation, also contribute to maintaining client and counterparty confidence, and it is possible that rating changes could
influence the performance of some of our businesses. The acquisition of the Credit Suisse Group has elevated these risks
and may cause these risks to intensify. Upon the close of the acquisition in June 2023, Fitch Ratings Ireland Limited
downgraded the Long-Term Issuer Default Ratings (IDRs) of UBS AG to “A+” from “AA–“. Fitch Ratings Ltd. also
upgraded Credit Suisse AG’s Long-Term IDR to “A+” from “BBB+”.
The requirement to maintain a liquidity coverage ratio of high-quality liquid assets to estimated stressed short-term net cash
outflows, and other similar liquidity and funding requirements, oblige us to maintain high levels of overall liquidity, limit our
ability to optimize interest income and expense, make certain lines of business less attractive and reduce our overall ability
to generate profits. The liquidity coverage ratio and net stable funding ratio requirements are intended to ensure that we
are not overly reliant on short-term funding and that we have sufficient long-term funding for illiquid assets. The relevant
calculations make assumptions about the relative likelihood and amount of outflows of funding and available sources of
additional funding in market-wide and firm-specific stress situations. In an actual stress situation, however, our funding
outflows could exceed the assumed amounts.
Annual Report 2025 |
Financial and operating performance | Accounting and financial reporting 36
Financial and operating
performance
Management report
Accounting and financial reporting
Critical accounting estimates and judgments
In preparing our financial statements in accordance with IFRS Accounting Standards, as issued by the International
Accounting Standards Board (the IASB), we apply judgment and make estimates and assumptions that may involve
significant uncertainty at the time they are made. We regularly reassess those estimates and assumptions, which
encompass historical experience, expectations of the future and other pertinent factors, to determine their continuing
relevance based on current conditions and update them as necessary. Changes in estimates and assumptions may have
significant effects on the financial statements. Furthermore, actual results may differ significantly from our estimates,
which could result in significant losses to UBS AG, beyond what we expected or provided for.
Key areas involving a high degree of judgment and areas where estimates and assumptions are significant to the
consolidated financial statements include the following (the Notes referred to below are in “Notes to the UBS AG
consolidated financial statements” in the “Consolidated financial statements” section of this report):
–
determination of carrying amounts of assets and liabilities and treatment of reserves for business combinations under
common control (refer to “Note 1 Summary of material accounting policies, item 1 Consolidation and business
combinations” and “Note 28 Changes in organization and acquisitions and disposals of subsidiaries and businesses”);
–
expected credit loss measurement (refer to “Note 1 Summary of material accounting policies, item 2g Allowances and
provisions for expected credit losses” and “Note 19 Expected credit loss measurement”);
–
fair value measurement (refer to “Note 1 Summary of material accounting policies, item 2f Fair value of financial
instruments” and “Note 20 Fair value measurement”);
–
income taxes (refer to “Note 1 Summary of material accounting policies, item 6 Income taxes” and “Note 8 Income
taxes”);
–
provisions and contingent liabilities (refer to “Note 1 Summary of material accounting policies, item 10 Provisions and
contingent liabilities” and “Note 17 Provisions and contingent liabilities”); and
–
goodwill (refer to “Note 1 Summary of material accounting policies, item 9 Goodwill and other separately identifiable
intangible assets” and “Note 12 Goodwill and intangible assets”).
›
Refer to the “Risk factors” section of this report for more information
Accounting and financial reporting changes in 2025
Disclosures about Uncertainties in the Financial statements
In November 2025, the IASB issued illustrative examples
Disclosures about Uncertainties in the Financial Statements
, using
climate-related examples to illustrate how requirements in IFRS Accounting Standards are applied to report the effects of
uncertainties in the financial statements. The guidance provided through these examples is consistent with the manner
in which UBS AG prepares its financial statements.
Accounting and financial reporting changes after 2025
IFRS 18,
Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued a new standard, IFRS 18,
Presentation and Disclosure in Financial Statements
, which
replaces IAS 1,
Presentation of Financial Statements
, and is effective from 1 January 2027. The main changes introduced
by IFRS 18 relate to the structure of income statements, new disclosure requirements for management performance
measures and enhanced guidance on aggregation and disaggregation of information. UBS AG is assessing the impact of
the new requirements on its reporting but expects it to be limited.
Amendments to IFRS 9,
Financial Instruments
, and IFRS 7,
Financial Instruments: Disclosures
In May 2024, the IASB issued
Amendments to the Classification and Measurement of Financial Instruments –
Amendments to IFRS 9 and IFRS 7
derecognition of financial instruments, including introduction of an accounting policy election to derecognize financial
liabilities settled through electronic transfer systems before the settlement date, if certain conditions are met. The
Amendments also introduce new disclosure requirements for financial instruments with contractual terms that could
change the timing or amount of contractual cash flows. The Amendments are effective from 1 January 2026 and will
have limited impact on UBS AG’s financial statements.
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 37
UBS AG consolidated performance
Income statement
For the year ended
% change from
USD m
31.12.25
31.12.24
31.12.23
31.12.24
Net interest income
Other net income from financial instruments measured at fair value through profit or loss
Net fee and commission income
Other income
Total revenues
Credit loss expense / (release)
Personnel expenses
General and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Comprehensive income
Total comprehensive income
Total comprehensive income attributable to non-controlling interests
Total comprehensive income attributable to shareholders
Net integration-related expenses, by business division and Group Items
For the year ended
USD m
31.12.25
31.12.24
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
1
Non-core and Legacy
Group Items
2
Net integration-related expenses
of which: total revenues
1,2
of which: operating expenses
of which: personnel expenses
of which: general and administrative expenses
of which: depreciation, amortization and impairment of non-financial assets
1 Includes a USD 128m gain from the sale of a stake in a subsidiary, Credit Suisse Securities (China) Limited. 2 Includes a USD 943m loss from the repurchase of legacy Credit Suisse debt instruments.
2025 compared with 2024
The legal merger of UBS AG and Credit Suisse AG on 31 May 2024 has had a significant impact on the results from June
2024 onward. This discussion and analysis compares the results of the 2025 financial year, which cover twelve full months
of post-merger results, with those of the 2024 financial year, which included seven full months of post-merger results.
This is a material driver in many of the increases across both revenues and operating expenses.
›
Refer to “Note 28 Changes in organization and acquisitions and disposals of subsidiaries and businesses” in the “Consolidated
financial statements” section of this report for more information about the accounting for the merger of UBS AG and Credit
Suisse AG
Results 2025 vs 2024
In 2025, net profit attributable to shareholders increased by USD 2,060m, to USD 3,541m, and included a net tax expense
of USD 534m.
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 38
Operating profit before tax increased by USD 1,668m, or 69%, to USD 4,101m, reflecting higher total revenues, partly
offset by higher operating expenses , with credit loss expenses broadly stable . Total revenues increased by USD 5,365m,
or 13%, to USD 47,688m and included increases driven by the consolidation of Credit Suisse AG revenues for the full
year and from foreign currency effects. The increase in total revenues was driven by increases of USD 3,962m in net
fee and commission income and USD 2,669m in total combined net interest income and other net income from
financial instruments measured at fair value through profit and loss, partly offset by a USD 1,265m decrease in other
income. Operating expenses increased by USD 3,692m, or 9%, to USD 43,038m and included increases driven by the
consolidation of Credit Suisse AG expenses for the full year and from foreign currency effects, as well as an increase of
USD 552m in integration-related expenses. The overall increase was mainly driven by increases of USD 2,744m in
personnel expenses and USD 933m in general and administrative expenses. Net credit loss expenses were USD 549m,
compared with USD 544m in 2024.
Integration-related expenses are temporary, incremental and directly related to the integration of Credit Suisse into
UBS, including costs of internal staff and contractors substantially dedicated to integration activities, retention awards,
redundancy costs, incremental expenses from the shortening of useful lives of property, equipment and software, and
impairment charges relating to these assets. Integration-related expenses in general and administrative expenses
primarily included shared services costs charged from other companies in the UBS Group reporting scope, consulting
fees and outsourcing costs. Classification as integration-related expenses does not affect the timing of recognition and
measurement of those expenses or the presentation thereof in the income statement .
Total revenues
Net interest income and other net income from financial instruments measured at fair value through profit or loss
Total combined net interest income and other net income from financial instruments measured at fair value through
profit or loss increased by USD 2,669m to USD 20,306m.
The year-on-year variance was mainly driven by a USD 1,415m increase in the Investment Bank’s revenues to
USD 7,544m, mainly driven by Global Markets. This increase was mostly due to higher volatility and increased levels of
client activity in Derivatives & Solutions, as well as higher client balances in Prime Brokerage within Financing. In addition,
revenues in Global Wealth Management increased by USD 1,009m to USD 8,382m and revenues in Personal & Corporate
Banking increased by USD 604m to USD 5,359m, both mainly driven by the consolidation of Credit Suisse AG revenues
for the full year.
The aforementioned increases were partly offset by Non-core and Legacy, which reported negative revenues of
USD 202m, compared with positive USD 32m in 2024, reflecting lower net gains from position exits and lower net interest
income from securitized product and credit portfolios. Additionally, Group Items revenues were negative USD 760m,
compared with negative USD 648m in 2024, mainly driven by higher funding costs, partly offset by lower mark-to-market
losses from Group hedging and own debt, including hedge accounting ineffectiveness.
›
Refer to “Note 3 Net interest income and other net income from financial instruments measured at fair value through profit or
loss” in the “Consolidated financial statements” section of this report for more information
›
Refer to the relevant business division and Group Items commentary in this section for more information about the specific
revenues of each of the business divisions and Group Items
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 39
Net interest income and other net income from financial instruments measured at fair value through profit or loss
For the year ended
% change from
USD m
31.12.25
31.12.24
31.12.23
31.12.24
Net interest income from financial instruments measured at amortized cost and fair value through other
comprehensive income
Net interest income from financial instruments measured at fair value through profit or loss and other
Other net income from financial instruments measured at fair value through profit or loss
Total
Global Wealth Management
of which: net interest income
of which: transaction-based income from foreign exchange and other intermediary activity
1
Personal & Corporate Banking
of which: net interest income
of which: transaction-based income from foreign exchange and other intermediary activity
1
Asset Management
Investment Bank
Non-core and Legacy
Group Items
1 Mainly includes spread-related income in connection with client-driven transactions, foreign currency translation effects and income and expenses from precious metals, which are included in the income statement
line Other net income from financial instruments measured at fair value through profit or loss. The amounts reported on this line are one component of Transaction-based income in the management discussion and
analysis in the “Global Wealth Management” and “Personal & Corporate Banking” sections of this report.
Net fee and commission income
Net fee and commission income increased by USD 3,962m to USD 27,400m.
Fees from portfolio management, investment funds and related services increased by USD 2,558m to USD 19,555m,
mainly driven by higher average levels of fee-generating assets in Global Wealth Management, primarily from mandates,
reflecting positive market performance and net new fee-generating asset inflows. The increase was also driven by the
impact of the consolidation of Credit Suisse AG revenues for the full year, predominantly in Global Wealth Management
and Asset Management.
Net brokerage fees increased by USD 1,014m to USD 5,096m, mainly driven by increased volumes in Cash Equities in
Execution Services in the Investment Bank and higher levels of client activity in Global Wealth Management, across all
regions in both of the aforementioned business divisions. In addition, Global Wealth Management included an increase
driven by the consolidation of Credit Suisse AG revenues for the full year.
›
Refer to “Note 4 Net fee and commission income” in the “Consolidated financial statements” section of this report for more
information
›
Refer to the relevant business division commentary in this section for further information about how components of fee and
commission income are presented within the business division results
Other income
Other income was negative USD 17m, compared with positive USD 1,248m in 2024, and included the consolidation of
Credit Suisse AG income for the full year.
Included in 2025 were net losses of USD 995m related to the repurchase of
UBS AG’s own debt instruments, mainly reflecting a net loss of USD 943m from the repurchase of legacy Credit Suisse
debt instruments, and a net loss of USD 230m related to an investment in an associate, compared with a loss of USD 80m
in 2024. These losses were partly offset by gains of USD 128m gain from the sale of a stake in Credit Suisse Securities
(China) Limited and USD 64m from the Swisscard transactions. There was also a release of USD 42m related to other
financial liabilities in Global Wealth Management and a gain of USD 33m from the sale of our wealth management
business in India. Included in 2024 were USD 125m net gains from the sale of non-strategic businesses in Asset
Management and a USD 119m gain related to the sale of an investment in an associate. Income from shared services
provided to UBS Group AG, or its subsidiaries, was USD 658m in 2025, compared with USD 733m in 2024.
›
Refer to “Note 5 Other income” in the “Consolidated financial statements” section of this report for more information
›
Refer to “Note 28 Changes in organization and acquisitions and disposals of subsidiaries and businesses” in the “Consolidated
financial statements” section of this report for more information about disposals of subsidiaries and businesses
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 40
Credit loss expense / release
Total net credit loss expenses were USD 549m, reflecting net expenses of USD 8m related to stage 1 and 2 positions and
net expenses of USD 542m related to credit-impaired stage 3 positions. Net credit loss expenses were USD 544m in 2024.
›
Refer to “Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement” and
“Note 19 Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more
information about credit loss expenses / releases
›
Refer to the “Risk factors” section of this report for more information
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Total
For the year ended 31.12.25
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the year ended 31.12.24
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the year ended 31.12.23
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 41
Operating expenses
Personnel expenses
Personnel expenses increased by USD 2,744m to USD 22,702m, mainly reflecting the consolidation of Credit Suisse AG
expenses for the full year. Additionally, there were increases in financial advisor compensation, resulting from higher
compensable revenues, and accruals for variable compensation, reflecting business performance. In addition, there was
an increase in expenses for post-employment benefit plans, resulting from a one-time pre-tax loss of USD 147m due to
the integration of the Credit Suisse Swiss 1e plan into the Credit Suisse Swiss pension plan as of 1 January 2027, with an
offsetting gain in other comprehensive income.
›
Refer to “Note 6 Personnel expenses”, “Note 25 Post-employment benefit plans” and “Note 26 Employee benefits: variable
compensation” in the “Consolidated financial statements” section of this report for more information
General and administrative expenses
General and administrative expenses increased by USD 933m to USD 17,481m, mainly driven by the consolidation of
Credit Suisse AG expenses for the full year. The overall increase was largely attributable to an increase of USD 1,506m
related to shared services costs for technology, finance and risk charged by shared services subsidiaries of the UBS Group.
General and administrative expenses included a USD 180m expense related to the Swisscard transactions, compared with
an expense of USD 41m in 2024, and an USD 88m increase in technology costs. These increases were partly offset by a
USD 906m decrease in expenses for litigation, regulatory and similar matters, mainly due to the costs recognized in 2024
when UBS agreed to fund an offer by the Credit Suisse supply chain finance funds to redeem all of the outstanding units
in the respective funds.
›
Refer to “Note 7 General and administrative expenses” and “Note 17 Provisions and contingent liabilities” in the “Consolidated
financial statements” section of this report for more information
Operating expenses
For the year ended
% change from
USD m
31.12.25
31.12.24
31.12.23
31.12.24
Personnel expenses
of which: salaries
of which: variable compensation
of which: performance awards
of which: financial advisors
1
of which: other
of which: other personnel expenses
2
General and administrative expenses
of which: net expenses for litigation, regulatory and similar matters
Depreciation, amortization and impairment of non-financial assets
Total operating expenses
1 Financial advisor compensation consists of cash compensation, determined using a formulaic approach based on production, and deferred awards. It also includes expenses related to compensation commitments
with financial advisors entered into at the time of recruitment that are subject to vesting requirements. 2 Consists of expenses related to contractors, social security, post-employment benefit plans, and other
personnel expenses. Refer to “Note 6 Personnel expenses” in the “Consolidated financial statements” section of this report for more information.
Tax
Income tax expenses of USD 534m were recognized for UBS AG in 2025, representing an effective tax rate of 13.0%,
compared with USD 900m for 2024, which represented an effective tax rate of 37.0%.
The income tax expenses for 2025 included a Swiss tax expense of USD 559m, which included current tax expenses of
USD 527m in respect of taxable profits of UBS Switzerland AG and other Swiss entities and deferred tax expenses of
USD 32m.
Income tax expenses also included a net non-Swiss tax benefit of USD 25m, which reflected current tax expenses of
USD 710m, which included USD 145m relating to US corporate alternative minimum tax, with an equivalent deferred tax
benefit for deferred tax assets (DTAs) recognized in respect of tax credits carried forward, and USD 565m in respect of
other taxable profits of non-Swiss subsidiaries and branches. These were partly offset by a net deferred tax benefit of
USD 735m, which included USD 145m related to the aforementioned deferred tax benefit, USD 747m in respect of a net
upward revaluation of DTAs, USD 215m in respect of an increase in DTAs that resulted from an increase in the expected
value of future tax deductions for deferred compensation awards due to an increase in the Group’s share price during
the year and USD 118m in respect of an increase in DTA recognition for UBS AG’s US branch. These benefits were partly
offset by an expense of USD 490m that primarily related to the amortization of DTAs previously recognized in relation to
tax losses carried forward and deductible temporary differences.
›
Refer to “Note 8 Income taxes” in the “Consolidated financial statements” section of this report for more information
›
Refer to the “Risk factors” section of this report for more information
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 42
Total comprehensive income attributable to shareholders
In 2025, total comprehensive income attributable to shareholders was USD 7,772m, reflecting net profit of USD 3,541m
and other comprehensive income (OCI), net of tax, of USD 4,231m.
Foreign currency translation OCI was USD 3,381m, mainly due to the weakening of the US dollar against the Swiss franc
and the euro.
OCI related to cash flow hedges was USD 1,295m, mainly reflecting net losses on hedging instruments that were
reclassified from OCI to the income statement and net unrealized gains on US dollar hedging derivatives resulting from
decreases in the relevant US dollar long-term interest rates.
OCI related to own credit on financial liabilities designated at fair value was negative USD 567m, primarily due to a
tightening of our own credit spreads.
›
Refer to “Statement of comprehensive income” in the “Consolidated financial statements” section of this report for more
information
›
Refer to “Note 20 Fair value measurement” in the “Consolidated financial statements” section of this report for more information
about own credit on financial liabilities designated at fair value
›
Refer to “Note 24 Hedge accounting” in the “Consolidated financial statements” section of this report for more information about
cash flow hedges of forecast transactions
Sensitivity to interest rate movements
As of 31 December 2025, it is estimated that a parallel shift in yield curves by +100 basis points could lead to a combined
increase in annual net interest income from our banking book of approximately USD 1.4bn in the first year after such a
shift. Of this increase, approximately USD 1.1bn, USD 0.1bn and USD 0.1bn would result from changes in Swiss franc,
US dollar and euro interest rates, respectively.
A parallel shift in yield curves by –100 basis points could lead to a combined increase in annual net interest income of
approximately USD 0.9bn. Of this increase, approximately USD 1.2bn would result from changes in Swiss franc interest
rates, driven by both contractual and assumed flooring benefits under negative interest rates. US dollar and euro interest
rates would lead to a partly offsetting decrease of USD 0.1bn and USD 0.1bn, respectively.
These estimates do not represent net interest income forecasts, as they are based on a hypothetical scenario of an
immediate change in interest rates, equal across all currencies and relative to implied forward rates as of
31 December 2025 applied to our banking book. These estimates further assume no change to balance sheet size and
product mix, stable foreign exchange rates, and no specific management action.
Seasonal characteristics
Our revenues may show seasonal patterns, notably in the Investment Bank and transaction-based revenues for Global
Wealth Management, and typically reflect the highest client activity levels in the first quarter, with lower levels throughout
the rest of the year, especially during the summer months and the end-of-year holiday season.
Key figures
Below we provide an overview of selected key figures of UBS AG consolidated. For further information about key figures
related to capital management, refer to the “Capital management” section of this report.
Cost / income ratio
The cost / income ratio was 90.2%, compared with 93.0%, reflecting an increase in total revenues, partly offset by an
increase in operating expenses.
Return on common equity tier 1 capital
The return on common equity tier 1 (CET1) capital was 5.0%, compared with 2.2%, reflecting an increase in net profit
attributable to shareholders, partly offset by an increase in average CET1 capital.
Annual Report 2025 |
Financial and operating performance | UBS AG consolidated performance 43
CET1 capital
CET1 capital decreased by USD 3.4bn to USD 70.4bn as of 31 December 2025, mainly as operating profit before tax of
USD 4.1bn and foreign currency translation gains of USD 3.2bn were more than offset by dividend accruals of USD 9.0bn
and current tax expenses of USD 1.2bn.
Risk-weighted assets
During 2025, RWA decreased by USD 5.3bn to USD 489.8bn, driven by a USD 15.5bn decrease resulting from asset size
and other movements, an USD 8.6bn decrease as a result of the implementation of the final Basel III standards and a
decrease of USD 4.2bn resulting from model updates and other methodology changes. These decreases were partly
offset by a USD 23.1bn increase from currency effects.
CET1 capital ratio
Our CET1 capital ratio decreased to 14.4% from 14.9%, reflecting a USD 3.4bn decrease in CET1 capital, partly offset
by a USD 5.3bn decrease in RWA.
Leverage ratio denominator
During 2025, the LRD increased by USD 99.6bn to USD 1,622.9bn, mainly driven by a USD 110.6bn increase from
currency effects and a USD 28.8bn increase as a result of the implementation of the final Basel III standards, partly offset
by a USD 39.8bn decrease from asset size and other movements.
CET1 leverage ratio
Our CET1 leverage ratio decreased to 4.3% from 4.8%, due to the aforementioned increase in the LRD and the
aforementioned decrease in CET1 capital.
Personnel
The number of internal personnel employed as of 31 December 2025 was 61,899 (full-time equivalents), a net decrease
of 7,083 compared with 31 December 2024.
Equity, CET1 capital and returns
As of or for the year ended
USD m, except where indicated
31.12.25
31.12.24
31.12.23
Net profit
Net profit attributable to shareholders
Equity
Equity attributable to shareholders
less: goodwill and intangible assets
Tangible equity attributable to shareholders
less: other CET1 deductions
CET1 capital
Return on equity
Return on equity (%)
Return on tangible equity (%)
Return on CET1 capital (%)
Annual Report 2025 |
Financial and operating performance | Global Wealth Management 44
Global Wealth Management
Global Wealth Management
As of or for the year ended
% change from
USD m, except where indicated
31.12.25
31.12.24
31.12.24
Results
Net interest income
6,550
5,901
11
Recurring net fee income
13,671
12,082
13
Transaction-based income
1,2
5,159
4,122
25
Other revenues
1,3
66
43
53
Total revenues
25,446
22,148
15
Credit loss expense / (release)
47
(1)
Operating expenses
20,776
18,893
10
Business division operating profit / (loss) before tax
4,624
3,255
42
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
1
42.0
(9.9)
Cost / income ratio (%)
1
81.6
85.3
Financial advisor compensation
4
5,654
5,292
7
Net new money (USD bn)
1
7.9
13.0
Invested assets (USD bn)
1
4,753
4,182
14
Loan volumes (USD bn)
1,5
328.6
302.2
9
Customer deposit volumes (USD bn)
1,6
479.3
470.6
2
Credit-impaired loan portfolio as a percentage of total loan portfolio, gross (%)
1,7
0.5
0.4
Advisors (full-time equivalents)
9,420
9,803
(4)
1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. Each alternative performance measure (APM) that qualifies as a non-GAAP measure as defined
by US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to this report. 2 Is composed of USD 3,355m (2024: USD 2,644m) of net fee and commission
income, USD 1,800m (2024: USD 1,497m) of other net income from financial instruments measured at fair value through profit or loss and USD 4m (2024: negative USD 19m) of other income as reflected in the UBS
AG financial statements. Income related to certain financial instruments not directly linked to client activity and measured at fair value that was previously presented as transaction-based income is presented as other
revenues from the fourth quarter of 2025 onward. This change has been applied prospectively. 3 Are composed of USD 33m (2024: negative USD 25m) of other net income from financial instruments measured at
fair value through profit or loss and USD 33m (2024: USD 68m) of other income as reflected in the UBS AG financial statements. Income related to certain financial instruments not directly linked to client activity and
measured at fair value that was previously presented as transaction-based income is presented as other revenues from the fourth quarter of 2025 onward. This change has been applied prospectively. The line was
renamed “Other revenues” (previously “Other income”) in the fourth quarter of 2025. 4 Relates to licensed professionals with the ability to provide investment advice to clients in the Americas. Consists of cash
compensation, determined using a formulaic approach based on production, and deferred awards. Also includes expenses related to compensation commitments with financial advisors entered into at the time of
recruitment that are subject to vesting requirements. Recruitment loans to financial advisors were USD 1,493m as of 31 December 2025. 5 Presented gross of expected credit losses. Is composed of USD 323.8bn
(31 December 2024: USD 297.6bn) classified as Loans and advances to customers and USD 4.8bn (2024: USD 4.6bn) classified as Brokerage receivables in the UBS AG financial statements. 6 Is composed of
USD 474.0bn (31 December 2024: USD 464.7bn) classified as Customer deposits and USD 5.3bn (2024: USD 5.9bn) classified as Brokerage payables in the UBS AG financial statements. 7 Refer to the “Risk
management and control” section of this report for more information about credit-impaired exposures. Excludes loans to financial advisors.
2025 compared with 2024
Results
Profit before tax increased by USD 1,369m, or 42%, to USD 4,624m, largely driven by higher total revenues and the
positive impact from the merger of UBS AG and Credit Suisse AG, partly offset by higher operating expenses.
Total revenues
Total revenues increased by USD 3,298m, or 15%, to USD 25,446m, mainly reflecting higher recurring net fee income,
transaction-based income and net interest income. The remaining increase was due to the consolidation of Credit
Suisse AG revenues for the full year.
Net interest income increased by USD 649m, or 11%, to USD 6,550m, mainly driven by the consolidation of Credit
Suisse AG net interest income for the full year. The remaining variance was mainly due to balance sheet optimization
measures, lower liquidity and funding costs, positive foreign currency effects, and the effects of favorable changes in
deposit mix. These increases were partly offset by the impact of lower central bank interest rates on deposit revenues
and by lower loan revenues, which reflected lower margins.
Recurring net fee income increased by USD 1,589m, or 13%, to USD 13,671m, mainly due to higher average levels of
fee-generating assets, primarily from mandates, reflecting positive market performance and net new fee-generating asset
inflows in 2025. The increase was also due to the consolidation of Credit Suisse AG recurring net fee income for the full
year.
Transaction-based income increased by USD 1,037m, or 25%, to USD 5,159m, mainly driven by higher levels of client
activity across all regions and also driven by contributions from Structured Solutions, Cash Equities, Investment Funds and
Wealth Planning revenues, as well as by the consolidation of Credit Suisse AG transaction-based income for the full year.
Other revenues increased by USD 23m to USD 66m, driven by a release of USD 42m related to other financial liabilities,
a USD 34m fair value gain driven from a strategic partnership and a USD 33m gain from the sale of our wealth
management business in India and included a net loss of USD 62m related to an investment in an associate. The remaining
variance was mainly due to lower shared services costs charged to other subsidiaries of UBS Group AG, largely related to
secondments. Other revenues in 2024 included a loss of USD 21m related to an investment in an associate.
Annual Report 2025 |
Financial and operating performance | Global Wealth Management 45
Credit loss expense / release
Net credit loss expenses were USD 47m, reflecting net expenses on credit-impaired positions and net releases related to
performing positions. Net credit loss releases were USD 1m in 2024.
Operating expenses
Operating expenses increased by USD 1,883m, or 10%, to USD 20,776m, mainly driven by the consolidation of Credit
Suisse AG operating expenses for the full year and by an increase in financial advisor compensation that resulted from
higher compensable revenues, partly offset by net releases in provisions for litigation, regulatory and similar matters,
primarily reflecting USD 284m of releases related to the resolution of a legacy matter concerning cross-border business
activities in France.
›
Refer to “Note 17 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this report for more
information about litigation, regulatory and similar matters
Cost / income ratio
The cost / income ratio decreased to 81.6% from 85.3%, as an increase in total revenues more than offset an increase
in operating expenses.
Invested assets
Invested assets increased by USD 571bn, or 14%, to USD 4,753bn, mainly driven by positive market performance of
USD 377bn, positive foreign currency effects of USD 126bn and net new asset inflows, partly offset by the effects of
USD 27bn as a result of UBS’s strategic decisions to exit certain markets or cease offering certain services.
Loan volumes
Loan volumes increased by USD 26.4bn to USD 328.6bn, mainly driven by positive foreign currency effects and positive
net new loan volumes.
›
Refer to the “Risk management and control” section of this report for more information
Customer deposit volumes
Customer deposit volumes increased by USD 8.7bn to USD 479.3bn, mainly driven by positive foreign currency effects,
partly offset by net new deposit volume outflows.
Personal & Corporate Banking
Personal & Corporate Banking – in Swiss francs
As of or for the year ended
% change from
CHF m, except where indicated
31.12.25
31.12.24
31.12.24
Results
Net interest income
3,731
3,554
5
Recurring net fee income
1,2
1,405
1,190
18
Transaction-based income
1,3
1,736
1,529
14
Other revenues
1,4
(46)
32
Total revenues
6,826
6,305
8
Credit loss expense / (release)
285
348
(18)
Operating expenses
5,165
4,152
24
Business division operating profit / (loss) before tax
1,376
1,805
(24)
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
1
(23.8)
(12.2)
Cost / income ratio (%)
1
75.7
65.9
Net interest margin (bps)
1
149
168
Loans, gross (CHF bn)
248.3
245.3
1
Customer deposits (CHF bn)
250.0
255.5
(2)
Credit-impaired loan portfolio as a percentage of total loan portfolio, gross (%)
1,5
1.3
1.5
1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. Each alternative performance measure (APM) that qualifies as a non-GAAP measure as defined
by US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to this report. 2 Is composed of net fee and commission income and other income as reflected
in the UBS AG financial statements. For reconciliation information in US dollar amounts, refer to the corresponding footnote in the table below. 3 Is composed of net fee and commission income, other net income
from financial instruments measured at fair value through profit or loss and other income as reflected in the UBS AG financial statements. For reconciliation information in US dollar amounts, refer to the corresponding
footnote in the table below. Income related to certain financial instruments not directly linked to client activity and measured at fair value that was previously presented as transaction-based income is presented as
other revenues from the fourth quarter of 2025 onward. This change has been applied prospectively. 4 Are composed of other net income from financial instruments measured at fair value through profit or loss,
and other income as reflected in the UBS AG financial statements. For reconciliation information in US dollar amounts, refer to the corresponding footnote in the table below. Income related to certain financial
instruments not directly linked to client activity and measured at fair value that was previously presented as transaction-based income is presented as other revenues from the fourth quarter of 2025 onward. This
change has been applied prospectively. The line was renamed “Other revenues” (previously “Other income”) in the fourth quarter of 2025. 5 Refer to the “Risk management and control” section of this report for
more information about credit-impaired exposures.
Annual Report 2025 |
Financial and operating performance | Personal & Corporate Banking 46
2025 compared with 2024
Results
Profit before tax decreased by CHF 429m, or 24%, to CHF 1,376m, as higher total revenues and lower net credit loss
expenses were more than offset by higher operating expenses.
Total revenues
Total revenues increased by CHF 521m, or 8%, to CHF 6,826m, mainly due to the consolidation of Credit Suisse AG
revenues for the full year, and included a net loss of CHF 133m related to an investment in an associate and a gain of
CHF 58m related to the Swisscard transactions.
Net interest income increased by CHF 177m, or 5%, to CHF 3,731m, largely reflecting the consolidation of Credit
Suisse AG net interest income for the full year.
Recurring net fee income increased by CHF 215m, or 18%, to CHF 1,405m, mostly due to the consolidation of Credit
Suisse AG recurring net fee income for the full year, as well as higher custody fees, mainly reflecting net new inflows and
positive market performance.
Transaction-based income increased by CHF 207m, or 14%, to CHF 1,736m, largely due to the consolidation of Credit
Suisse AG transaction-based income for the full year.
Other revenues were negative CHF 46m, compared with positive CHF 32m, and reflected a net loss of CHF 133m related
to an investment in an associate, partly offset by a gain of CHF 58m related to the Swisscard transactions. Other revenues
in 2024 included a loss of CHF 54m related to an investment in an associate.
Credit loss expense / release
Net credit loss expenses were CHF 285m, primarily reflecting net expenses on credit-impaired positions, compared with
net credit loss expenses of CHF 348m in 2024.
Operating expenses
Operating expenses increased by CHF 1,013m, or 24%, to CHF 5,165m, largely due to the consolidation of Credit
Suisse AG operating expenses for the full year, a CHF 164m expense related to the Swisscard transactions, and higher
integration-related expenses, partly offset by lower personnel expenses, including lower variable compensation, and by
CHF 29m of net releases in provisions for litigation, regulatory and similar matters related to the resolution of a legacy
matter concerning cross-border business activities in France.
›
Refer to “Note 17 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this report for more
information about litigation, regulatory and similar matters
Cost / income ratio
The cost / income ratio increased to 75.7% from 65.9%, as an increase in operating expenses more than offset an
increase in total revenues.
Personal & Corporate Banking – in US dollars
As of or for the year ended
% change from
USD m, except where indicated
31.12.25
31.12.24
31.12.24
Results
Net interest income
4,508
4,035
12
Recurring net fee income
1,2
1,698
1,350
26
Transaction-based income
1,3
2,099
1,734
21
Other revenues
1,4
(68)
39
Total revenues
8,238
7,159
15
Credit loss expense / (release)
349
393
(11)
Operating expenses
6,234
4,714
32
Business division operating profit / (loss) before tax
1,654
2,052
(19)
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
1
(19.4)
(9.9)
Cost / income ratio (%)
1
75.7
65.9
Net interest margin (bps)
1
149
168
Loans, gross (USD bn)
313.1
270.2
16
Customer deposits (USD bn)
315.2
281.4
12
Credit-impaired loan portfolio as a percentage of total loan portfolio, gross (%)
1,5
1.3
1.5
1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. Each alternative performance measure (APM) that qualifies as a non-GAAP measure as defined
by US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to this report. 2 Is composed of USD 1,669m (2024: USD 1,325m) of net fee and commission
income and USD 29m (2024: USD 25m) of other income as reflected in the UBS AG financial statements. 3 Is composed of USD 1,200m (2024: USD 995m) of net fee and commission income, USD 891m (2024:
USD 719m) of other net income from financial instruments measured at fair value through profit or loss and USD 8m (2024: USD 20m) of other income as reflected in the UBS AG financial statements. Income related
to certain financial instruments not directly linked to client activity and measured at fair value that was previously presented as transaction-based income is presented as other revenues from the fourth quarter of
2025 onward. This change has been applied prospectively. 4 Are composed of negative USD 40m (2024: Nil) of other net income from financial instruments measured at fair value through profit or loss and negative
USD 28m (2024: USD 39m) of other income as reflected in the UBS AG financial statements. Income related to certain financial instruments not directly linked to client activity and measured at fair value that was
previously presented as transaction-based income is presented as other revenues from the fourth quarter of 2025 onward. This change has been applied prospectively. The line was renamed “Other revenues”
(previously “Other income”) in the fourth quarter of 2025. 5 Refer to the “Risk management and control” section of this report for more information about credit-impaired exposures.
Annual Report 2025 |
Financial and operating performance | Asset Management 47
Asset Management
Asset Management
As of or for the year ended
% change from
USD m, except where indicated
31.12.25
31.12.24
31.12.24
Results
Net management fees
1,2
2,986
2,538
18
Performance fees
195
136
43
Net gain / (loss) from disposal
(30)
125
Total revenues
3,150
2,799
13
Credit loss expense / (release)
1
0
Operating expenses
2,440
2,334
5
Business division operating profit / (loss) before tax
709
465
52
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
1
52.4
27.1
Cost / income ratio (%)
1
77.5
83.4
Gross margin on invested assets (bps)
1
16
18
Information by business line / asset class
Net new money (USD bn)
1
Equities
3
3.0
28.1
Fixed Income
3
22.7
23.8
of which: money market
12.7
17.9
Multi-asset & Solutions
3
1.7
2.9
Hedge Fund Businesses
1.8
(4.0)
Real Estate & Private Markets
0.9
1.0
Total net new money excluding associates
30.1
51.9
of which: net new money excluding money market
17.5
34.0
Associates
4
0.3
8.8
Total net new money
30.4
60.6
Invested assets (USD bn)
1
Equities
3
904
755
20
Fixed Income
3
506
464
9
of which: money market
176
157
12
Multi-asset & Solutions
3
372
268
39
Hedge Fund Businesses
62
58
7
Real Estate & Private Markets
160
143
12
Total invested assets excluding associates
2,005
1,689
19
of which: passive strategies
1,040
807
29
Associates
4
93
84
11
Total invested assets
2,098
1,773
18
Information by region
Invested assets (USD bn)
1
Americas
489
443
10
Asia Pacific
5
256
224
14
EMEA (excluding Switzerland)
540
435
24
Switzerland
813
670
21
Total invested assets
2,098
1,773
18
Information by channel
Invested assets (USD bn)
1
Third-party institutional
1,193
1,008
18
Third-party wholesale
212
169
25
UBS’s wealth management businesses
601
512
17
Associates
4
93
84
11
Total invested assets
2,098
1,773
18
1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. Each alternative performance measure (APM) that qualifies as a non-GAAP measure as defined
by US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to this report. 2 Net management fees include transaction fees, fund administration revenues
(including net interest and trading income from lending activities and foreign-exchange hedging as part of the fund services offering), distribution fees, incremental fund-related expenses, gains or losses from seed
money and co-investments, funding costs, the negative pass-through impact of third-party performance fees, and other items that are not Asset Management’s performance fees. Net management fees are composed
of USD 69m (2024: USD 54m) of interest expense, USD 2,800m (2024: USD 2,407m) of recurring net fee and commission income, USD 79m (2024: USD 55m) of transaction-based net fee and commission income,
USD 53m (2024: USD 52m) of other net income from financial instruments measured at fair value through profit or loss, and USD 123m (2024: USD 78m) of other income as reflected in the UBS AG financial
statements. 3 In the third quarter of 2025, certain portfolios were reclassified from Equities and Fixed Income to Multi-asset & Solutions, as a result of aligning Credit Suisse presentation to that of UBS. These
changes were applied prospectively. 4 The invested assets and net new money amounts reported for associates are prepared in accordance with their local regulatory requirements and practices. 5 Includes invested
assets from associates.
Annual Report 2025 |
Financial and operating performance | Asset Management 48
2025 compared with 2024
Results
Profit before tax increased by USD 244m, or 52%, to USD 709m, reflecting higher total revenues, partly offset by higher
operating expenses, and included the impact from the consolidation of Credit Suisse AG for the full year. Profit before
tax in 2025 also included a net loss of USD 30m from disposals, predominantly reflecting a net loss of USD 29m related
to the sale of our O’Connor business to Cantor Fitzgerald. Profit before tax in 2024 included a net gain of USD 125m
from the sale of non-strategic businesses.
Total revenues
Total revenues increased by USD 351m, or 13%, to USD 3,150m, primarily reflecting the consolidation of Credit
Suisse AG revenues for the full year and higher performance fees, partly offset by the effects from the aforementioned
sales. The gross margin was 16 basis points.
Net management fees increased by USD 448m, or 18%, to USD 2,986m, largely reflecting the consolidation of Credit
Suisse AG net management fees for the full year, partly offset by a reduction in revenues related to Hedge Fund Businesses
(linked to the increase in performance fees mentioned below), while 2024 included a revaluation of a real-estate fund
co-investment.
Performance fees increased by USD 59m, or 43%, to USD 195m, mainly due to a USD 57m increase in revenues in Hedge
Fund Businesses.
Operating expenses
Operating expenses increased by USD 106m, or 5%, to USD 2,440m, largely due to the consolidation of Credit Suisse AG
operating expenses for the full year, partly offset by lower non-personnel and personnel expenses.
Cost / income ratio
The cost / income ratio decreased to 77.5% from 83.4%, as an increase in total revenues more than offset an increase
in operating expenses.
Invested assets
Invested assets increased by USD 325bn, or 18%, to USD 2,098bn, reflecting positive market performance of USD 171bn,
positive foreign currency effects of USD 131bn and net new money of USD 30bn, partly offset by a reduction of USD 7bn,
which included USD 4bn related to the first stage of the transfer of our O’Connor business. Excluding money market
flows and associates, net new money was USD 17bn.
Investment Bank
Investment Bank
As of or for the year ended
% change from
USD m, except where indicated
31.12.25
31.12.24
31.12.24
Results
Advisory
1,003
871
15
Capital Markets
1,745
1,511
15
Global Banking
2,748
2,382
15
Execution Services
2,186
1,714
28
Derivatives & Solutions
4,276
3,446
24
Financing
2,701
2,296
18
Global Markets
9,163
7,455
23
of which: Equities
6,668
5,563
20
of which: Foreign Exchange, Rates and Credit
2,494
1,893
32
Total revenues
11,910
9,837
21
Credit loss expense / (release)
147
98
50
Operating expenses
9,476
8,753
8
Business division operating profit / (loss) before tax
2,288
987
132
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
1
131.8
658.5
Cost / income ratio (%)
1
79.6
89.0
1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. Each alternative performance measure (APM) that qualifies as a non-GAAP measure as defined
by US Securities and Exchange Commission (SEC) regulations is designated as such in the table of APMs in the appendix to this report.
Annual Report 2025 |
Financial and operating performance | Investment Bank 49
2025 compared with 2024
Results
Profit before tax increased by USD 1,301m, or 132%, to USD 2,288m, due to higher total revenues, partly offset by
higher operating expenses and net credit loss expenses.
Total revenues
Total revenues increased by USD 2,073m, or 21%, to USD 11,910m, due to higher revenues in Global Markets and
Global Banking, and included a USD 128m gain from the sale of a stake in a subsidiary, Credit Suisse Securities (China)
Limited (CSS), and a gain on the sale of a strategic investment.
Global Banking
Global Banking revenues increased by USD 366m, or 15%, to USD 2,748m, driven by higher revenues in Capital Markets
and Advisory, and included the aforementioned gain from the sale of a stake in CSS.
Advisory revenues increased by USD 132m, or 15%, to USD 1,003m, largely driven by an increase in merger and
acquisition transaction revenues.
Capital Markets revenues increased by USD 234m, or 15%, to USD 1,745m, mostly driven by higher revenues in Equity
Capital Markets and by the aforementioned gain from the sale of a stake in CSS.
Global Markets
Global Markets revenues increased by USD 1,708m, or 23%, to USD 9,163m, driven by higher Derivatives & Solutions,
Execution Services and Financing revenues, and included a gain of USD 102m on a strategic investment, which was split
equally across product verticals.
Execution Services revenues increased by USD 472m, or 28%, to USD 2,186m, mainly driven by higher Cash Equities
revenues across all regions, reflecting higher volumes.
Derivatives & Solutions revenues increased by USD 830m, or 24%, to USD 4,276m, driven by higher volatility and higher
levels of client activity.
Financing revenues increased by USD 405m, or 18%, to USD 2,701m, led by Prime Brokerage revenues, supported by
higher client balances. Included in 2024 was a gain of USD 51m on the sale of our investment in an associate.
Equities
Global Markets Equities revenues increased by USD 1,105m, or 20%, to USD 6,668m, mainly driven by higher revenues
in Prime Brokerage, Cash Equities and Equity Derivatives. Included in 2024 was a gain of USD 51m on the sale of our
investment in an associate.
Foreign Exchange, Rates and Credit
Global Markets Foreign Exchange, Rates and Credit revenues increased by USD 601m, or 32%, to USD 2,494m, mainly
driven by increases in Foreign Exchange revenues, and included a gain of USD 102m on a strategic investment.
Credit loss expense / release
Net credit loss expenses were USD 147m, mainly reflecting net expenses on credit-impaired positions, compared with
net credit loss expenses of USD 98m in 2024.
Operating expenses
Operating expenses increased by USD 723m, or 8%, to USD 9,476m, reflecting higher personnel expenses, adverse
foreign currency effects and higher technology expenses.
Cost / income ratio
The cost / income ratio decreased to 79.6% from 89.0%, as an increase in total revenues more than offset an increase
in operating expenses.
Annual Report 2025 |
Financial and operating performance | Non-core and Legacy 50
Non-core and Legacy
Non-core and Legacy
As of or for the year ended
% change from
USD m
31.12.25
31.12.24
31.12.24
Results
Total revenues
(128)
335
Credit loss expense / (release)
3
55
(95)
Operating expenses
2,873
3,673
(22)
Operating profit / (loss) before tax
(3,003)
(3,392)
(11)
2025 compared with 2024
Results
Loss before tax was USD 3,003m, compared with a loss before tax of USD 3,392m.
Total revenues
Total revenues were negative USD 128m, compared with total revenues of USD 335m, and reflected lower net gains
from position exits and lower net interest income from securitized product and credit portfolios. Total revenues in 2025
included a loss of USD 11m from the sale of Select Portfolio Servicing, the US mortgage servicing business of Credit
Suisse. Total revenues in 2024 included a USD 67m gain from the sale of our investment in an associate.
Credit loss expense / release
Net credit loss expenses were USD 3m, compared with net credit loss expenses of USD 55m in 2024.
Operating expenses
Operating expenses decreased by USD 800m, or 22%, to USD 2,873m, mainly due to 2024 including litigation expenses
of USD 1,338m, largely reflecting expenses related to UBS agreeing in the second quarter of 2024 to fund an offer by
the Credit Suisse supply chain finance funds to redeem all the outstanding units of the respective funds. This effect was
partly offset by USD 723m of net expenses related to provisions for litigation, regulatory and similar matters in 2025.
Group Items
Group Items
As of or for the year ended
% change from
USD m
31.12.25
31.12.24
31.12.24
Results
Total revenues
(928)
45
Credit loss expense / (release)
3
0
Operating expenses
1,240
979
27
Operating profit / (loss) before tax
(2,171)
(935)
132
2025 compared with 2024
Results
Loss before tax was USD 2,171m, mainly reflecting a loss of USD 943m from the repurchase of legacy Credit Suisse debt
instruments, higher operating expenses, deferred tax asset (DTA) funding costs and mark-to-market losses from Group
hedging and own debt, including hedge accounting ineffectiveness. The USD 1,236m, or 132%, change in loss before
tax between periods was mainly due to the aforementioned loss from the debt repurchase, an increase in provisions for
litigation, regulatory and similar matters, and higher shared services costs charged by other subsidiaries of UBS Group
AG. In addition, 2025 included lower mark-to-market losses from Group hedging and own debt, including hedge
accounting ineffectiveness, than 2024.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet 51
Risk, capital, liquidity and
funding, and balance sheet
Management report
Audited information according to IFRS 7 and IAS 1
Risk and capital disclosures provided in line with the requirements of
IFRS 7,
Financial Instruments: Disclosures,
and IAS 1,
Presentation of
Financial Statements,
form part of the financial statements included in the “Consolidated financial
statements” section of this report and are audited by the independent registered public accounting firm Ernst & Young
Ltd, Basel. This information is marked as “Audited” within this section of the report.
Signposts
The
Audited |
signpost that is displayed at the beginning of a section, table or chart indicates that those items have been audited. A triangle symbol –
indicates the end of the audited section, table or chart.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet 52
Table of contents
53
Risk management and control
53
Top and emerging risks
54
Risk identification
57
Risk oversight
58
Risk appetite framework
59
Risk measurement
61
Credit risk
73
Market risk
81
Country risk
83
Non-financial risk
87
Model risk
88
Capital management
88
Capital management objectives
88
Swiss SRB total loss-absorbing capacity framework
91
Total loss-absorbing capacity
94
Risk-weighted assets
96
Leverage ratio denominator
97
Liquidity and funding management
97
Strategy, objectives and governance
98
Liquidity and funding stress testing
98
Management of liquidity and funding risk
99
Liquidity coverage ratio
100
Too-big-to-fail liquidity requirements
100
Net stable funding ratio
101
Balance sheet and off-balance sheet
101
Balance sheet
103
Off-balance sheet
104
Cash flows
106
Currency management
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 53
Risk management and control
In the initial phases of the integration of Credit Suisse, the risk management focus was on the alignment of governance
structures and frameworks, including the harmonization of Credit Suisse policies with UBS standards. In 2025, with the
exposure reductions in Non-core and Legacy and the significant achievements made with respect to client account
migrations (as part of the overall integration), we have substantially reduced the proportion of risks managed on legacy
Credit Suisse platforms. We also transitioned to a single model risk management framework.
Top and emerging risks
An overview of our top and emerging risks, from a risk management perspective, is disclosed below. Investors should
also carefully review all information set out in the “Risk factors” section of this report, where we discuss these and other
material risks that could have an effect on our ability to execute our strategy and may affect our business activities,
financial condition, results of operations and business prospects.
Top and emerging risk
Description
Geopolitical uncertainty
UBS AG remains watchful of a broad range of geopolitical developments and political changes in a number of
countries, including intensifying rivalries among major powers, the re-emergence of regional spheres of influence and
continued stress on multi-lateral economic and security institutions. Global trade relations remain fragile, as tariff-
related policies persist. In addition, structural challenges in the US–China relationship remain significant. In parallel, the
reshaping of international trade relationships is driving significant changes in global supply chains, adding further
uncertainty and potential disruption to cross-border trade flows.
Macroeconomic risks
UBS AG is exposed to a number of macroeconomic risks, as well as general market conditions. As noted in “Market,
credit and macroeconomic risks” in the “Risk factors” section of this report, these external pressures may have a
significant adverse effect on UBS AG’s business activities and related financial results, primarily through reduced
margins and revenues, asset impairments and other valuation adjustments. Accordingly, these macroeconomic factors
are considered in the development of stress-testing scenarios for UBS AG’s ongoing risk management activities.
Inflation has remained broadly stable in major Western economies, though there are still concerns that inflation could
return, including upward pressure on interest rates. Central banks’ monetary policies therefore continue to be a key
driver of financial market conditions. In parallel, concerns around developed market sovereign debt sustainability have
heightened, with fiscal deterioration in several advanced economies contributing to volatility in long-term bond yields.
UBS AG is closely monitoring foreign exchange volatility and currency valuations, including the weakening of the US
dollar and the appreciation of the Swiss franc against other major currencies.
Elevated valuations across various assets classes, alongside accelerated capital flows into artificial intelligence (AI)- and
technology-related equities, present the risk of a potential bubble, particularly if adoption trends in these areas slow or
macroeconomic conditions weaken.
Non-bank financial institutions
and private markets
Non-bank financial institutions (NBFIs) and private markets, in particular, have come further into focus in 2025,
expanding their role in credit provision, liquidity transformation and risk transfer across the financial system. We
remain watchful of the growing systemic and economic relevance of this sector, especially as its interconnectedness
with the financial sector has further deepened through funding relationships, derivatives exposures and the collateral
channel, heightening the potential for spillovers under stress.
Limited transparency around leverage, asset valuations and liquidity profiles may further obscure underlying risk
dynamics and complicate a comprehensive assessment of sector-wide vulnerabilities. These developments reinforce the
importance of disciplined monitoring and proactive risk management of exposures and concentrations, and the
channels through which stress in NBFIs or private markets could transmit to the broader financial system.
Regulatory and legal risks
UBS AG is exposed to substantial changes in the regulation of its businesses that could have a material adverse effect
on its business, as discussed in the “Regulatory and legal developments” section of this report and in “Regulatory and
legal risks” in the “Risk factors” section of this report.
As a global financial services firm, UBS AG is subject to many different legal, tax and regulatory regimes and extensive
regulatory oversight. UBS AG is exposed to the risk that regulatory requirements across different jurisdictions impose
inconsistent or conflicting requirements, or may do so in the future. UBS AG is also exposed to significant liability risk,
and it is subject to various claims, disputes, legal proceedings and government investigations, as noted in “Regulatory
and legal risks” in the “Risk factors” section of this report. Information about litigation, regulatory and similar matters
considered significant is disclosed in “Note 17 Provisions and contingent liabilities” in the “Consolidated financial
statements” section of this report.
Cyber risks, third-party risks and
operational resilience
Global geopolitical trends increase the likelihood of external state-driven cyber activity. Combined with a broader shift
toward more sophisticated forms of ransomware and other cyber threats, there is a risk of operational disruption to
business activities at UBS AG’s locations and those of third-party suppliers, including potential corruption or loss of
data. At the same time, the dynamic and material nature of recent geopolitical and environmental events, combined
with the operational complexity of all its businesses, leads to the risk of disruption through operational resilience
scenarios such as system failures or loss of third-party services.
›
Refer to “Non-financial risk” and “Cybersecurity and information security” in this section for more information
Conduct risks
Conduct risks are inherent in UBS AG’s businesses. Achieving fair outcomes for its clients, upholding market integrity
and cultivating the highest standards of employee conduct are of critical importance to UBS AG. Management of
conduct risks is an integral part of UBS AG’s risk management framework.
›
Refer to “Non-financial risk” in this section and “Strategy, management and operational risks” in the “Risk factors”
section of this report for more information
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 54
Top and emerging risk
Description
Financial crime risks
Financial crime (including money laundering, terrorist financing, sanctions violations, fraud, bribery, and corruption)
presents significant risk and is subject to heightened regulatory expectations and attention. Emerging technologies and
changing geopolitical risks further increase the complexity of identifying and preventing financial crime, in particular
managing the continuously evolving sanctions environment, and require investment in people, systems and
technology.
›
Refer to “Non-financial risk” in this section for more information
Sustainability and climate risks
Sustainability and climate risks continue to be in focus for UBS AG, for regulators and for stakeholders. To address
these emerging risks, UBS AG has further enhanced its transition and physical risk methodologies, integrated climate-
related financial risks into key risk frameworks and updated its sustainability and climate risk policy to align with the
requirements of FINMA Circular 2026/1 “Nature-related financial risks”.
›
Refer to “Sustainability and climate risk” in the “Risk management and control” section of the UBS Group Annual
Report 2025, available under “Annual reporting” at
ubs.com/investors
, for more information
›
Refer to “Appendix 1 – Governance” to the UBS Group Sustainability Report 2025, available under “Annual reporting”
at ubs.com/investors
, for a full description of our sustainability and climate risk policy framework
Regulatory requirements and industry guidelines are emerging simultaneously in various jurisdictions, leading to an
increased risk of divergence, which in turn increases the risk that UBS AG may not comply with all relevant regulations.
New technologies
New risks related to client demand for distributed ledger technology, blockchain-based assets and virtual currencies
continue to emerge. UBS AG’s exposure to these risks is still relatively limited, and relevant control frameworks are
continuously being enhanced and implemented. Technological developments in the areas of AI and digitalization will
have a significant impact in 2026 and create not only opportunities but also heightened operational risks.
With the ongoing digitalization and the adoption of new technologies, we continue to emphasize the responsible use
of AI and ethical data practices, in line with evolving regulatory requirements and client expectations. With rapidly
advancing technology and changing communication preferences, there is heightened focus on electronic
communications, including the use of approved channels and appropriate recordkeeping.
›
Refer to “Non-financial risk” in this section for more information
Risk identification
Risk identification at UBS AG is the process of systematically identifying, assessing and cataloging risks across all business
activities and risk categories. It is a fundamental component of UBS AG’s risk management approach, helping to ensure
that a comprehensive understanding of its risk exposure is maintained. UBS AG’s structured risk identification framework
integrates both bottom-up and top-down risk identification approaches and enhances its ability to capture, measure,
monitor and control risks, in alignment with global regulatory expectations. The process involves subject matter experts
from both the first and second lines of defense, including senior management across the organization, and is conducted
periodically, complementing day-to-day risk identification and risk management frameworks. By anchoring to a common
risk taxonomy and risk materiality approach, UBS AG aims to ensure consistent categorization and prioritization of risks
across business divisions and significant entities. Additionally, documenting root-cause drivers and early-warning signs
strengthens UBS AG’s ability to monitor emerging risks.
Various review and approval steps are embedded throughout the risk identification process to maximize risk transparency,
including presentation to senior governance bodies for each business division, applicable significant entities and at the
UBS AG level. The output of the process helps ensure that UBS AG’s stress-testing exercises take into account its key
vulnerabilities, while also supporting broader risk management activity.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 55
Risk categories
UBS AG categorizes its risk exposures in line with the UBS Group and as outlined in the table below. The risk appetite
framework is designed to capture all risk categories.
›
Refer to “Risk appetite framework” in this section for more information
Risk
managed by
Independent
oversight by
Financial risks
Audited |
Credit risk
:
the risk of loss resulting from the failure of a client or counterparty (including an issuer) to meet its
contractual obligations toward UBS AG. This includes loan underwriting risk and settlement risk.
Loan underwriting risk:
for further distribution.
Settlement risk:
but does not receive an expected value in return from the counterparty.
›
Refer to “Credit risk” in this section for more information
Business
divisions
Risk Control
Audited |
Market risk
: the risk of loss resulting from adverse movements in market variables. Market risks are actively taken
as part of trading activities but can also arise from non-trading activities. Market variables include observable factors, such
as interest rates, foreign exchange rates, equity prices, credit spreads and commodity (including precious metal) prices, as
well as variables that may be unobservable or only indirectly observable, such as volatilities and correlations. Market risk
also includes issuer risk.
Issuer risk:
derivatives referencing the issuer was subject to a credit-related event.
›
Refer to “Market risk” in this section for more information
Business
divisions and
Group
Treasury
Risk Control
Investment risk
: The risk of losses relative to the expected return on any particular investment (i.e. achieving lower actual
returns compared with expected returns).
›
Refer to “Market risk” in this section for more information
Business
divisions and
Group
Treasury
Risk Control
Treasury risk:
well as structural exposures.
Audited |
Liquidity risk:
Audited |
Funding risk:
strategy.
›
Refer to the “Liquidity and funding management” section of this report for more information
Interest rate risk in the banking book:
the risk to the firm’s capital and earnings arising from the adverse effects of
interest rate movements on the firm’s banking book positions. The risk is transferred from the originating business
divisions, i.e. Global Wealth Management and Personal & Corporate Banking, to Group Treasury to risk-manage this
centrally and benefit from firm-wide netting, while leaving the business divisions with margin management.
›
Refer to “Market risk” in this section for more information
Structural foreign exchange risk:
from changes in foreign exchange rates.
Group
Treasury
Risk Control
Pension risk:
the fair value of assets held in defined benefit pension funds and / or changes in the value of defined benefit pension
obligations due to changes in actuarial assumptions (e.g. discount rate, life expectancy and rate of pension increase)
and / or changes to plan designs.
›
Refer to “Market risk” in this section for more information
Group
Treasury and
Human
Resources
Risk Control
and Finance
Country risk:
transfer risk, which involves a country’s authorities preventing or restricting the payment of an obligation, as well as
systemic risk events arising from country-specific political or macroeconomic developments.
›
Refer to “Country risk” in this section for more information
Business
divisions
Risk Control
Sustainability and climate risk:
human rights and other relevant environmental and social matters. Sustainability and climate risks may materialize as
credit, market, liquidity, business or non-financial risks for UBS AG, potentially leading to adverse financial, liability or
reputational impacts. These risks extend to the value of investments and may also affect the value of collateral (e.g. real
estate). Sustainability and climate risk includes transition risk and physical risk.
Transition risk:
decarbonization, for example due to changes in policy, case law, technology or in the behavior of market participants.
This may contribute to a structural change across economies and consequently affect banks and the stability of the
wider financial sector.
Physical risk:
chronic risks that arise from an incrementally changing climate. Climate-driven physical risks may contribute to
structural changes across economies and consequently affect banks and the stability of the wider financial sector.
›
Refer to “Sustainability and climate risk” in the “Risk management and control” section of the UBS Group Annual Report
2025, available under “Annual reporting” at
ubs.com/investors
, for more information
Business
divisions
Risk Control
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 56
Risk
managed by
Independent
oversight by
Financial risks (continued)
Capital risk:
capital requirements.
›
Refer to the “Capital management” section of this report for more information
Group
Treasury
Risk Control
and Finance
Business risk:
the extent they are not offset by a decrease in expenses. For example, changes in the competitive landscape, client
behavior or market conditions can have a negative impact.
Business
divisions
Risk Control
and Finance
Strategic risk:
the idiosyncratic risk arising from the impact of strategic decisions on UBS, which can be driven by
exogenous factors, such as changes in the industry or regulatory environments, or by endogenous factors, such as
constraints related to or execution of strategic decisions.
›
Refer to “Strategy, management and operational risks” in the “Risk factors” section of this report for more information
Business
divisions and
Group
functions
Finance, Chief
Strategy Office
and Risk
Control
Non-financial risks
Compliance risk:
firm’s Code of Conduct and Ethics.
›
Refer to “Non-financial risk” in this section for more information
Business
divisions
GCORC
Employment risk:
employment practices, health and well-being, discrimination, performance and compensation, and employee-related taxes
and benefits. Also includes risks arising from loss of key staff, excessive turnover, inadequate resourcing and failure to
implement comprehensive succession plans for key positions, as well as those arising from failure to perform an
appropriate vetting process including stringent due diligence and background checks, in order to ensure on-boarded staff
are fit and proper.
Human
Resources
Conduct risk:
undermines the integrity of the financial system or impairs effective competition to the detriment of consumers.
GCORC
Market conduct risk:
the risk of failure to maintain appropriate standards to ensure fair and effective markets and
meet legal / regulatory requirements and expectations governing activities undertaken on or through a market or in
pricing- / transaction-related bilateral interactions between counterparties.
GCORC
Client suitability risk:
profile, including their investment objectives, financial situation, time horizon, risk tolerance, and knowledge and
experience, resulting in the client receiving a product or service that is not suitable for their individual circumstances.
GCORC
Financial crime risk:
sanctions or embargo violations, internal and external fraud, bribery, and corruption).
›
Refer to “Non-financial risk” in this section for more information
Business
divisions
GCORC
Operational risk:
causes (deliberate, accidental or natural).
›
Refer to “Non-financial risk” in this section for more information
Business
divisions
GCORC
Cybersecurity and information-security risk:
technology, or human error materially compromises the confidentiality, integrity or availability of UBS AG’s data,
systems or services.
›
Refer to “Non-financial risk” in this section for more information
Business
divisions and
Group
Technology
GCORC
Third-party risk:
legal entity perspective) and their subcontractors, including inadequate oversight or non-compliance with policy or
regulatory requirements that may lead to operational disruption, data compromise or reputational harm.
›
Refer to “Non-financial risk” in this section for more information
Business
divisions and
Group
functions
GCORC
Model risk:
decisions, or reputational damage) resulting from decisions based on incorrect, inadequate or misused model outputs
and reports.
›
Refer to “Model risk” in this section for more information
Business
divisions and
Group
functions
Risk Control
Legal risk:
of contractual or other legal obligations; (iii) an inability or failure to enforce or protect contractual rights or non-contractual
rights sufficiently to protect UBS AG’s interests; and (iv) being party to a claim or investigated by a regulator or public authority
in respect of any of the above (and the risk of loss of attorney–client privilege in the context of any such claim).
Business
divisions
Legal
Reputational risk:
view of clients, shareholders, regulators, employees or society, which may lead to potential financial loss and / or loss of
market share.
›
Refer to “Non-financial risk” in this section for more information
All business
divisions and
Group
functions
All control
functions
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 57
Overview of risks arising from our business activities
Key risks by business division and Group functions
Business divisions and Group functions
Key financial risks arising from business activities
Global Wealth Management
Credit risk
other real assets (such as ships and aircraft), private market and hedge fund interest, and investors’ uncalled
capital commitments, as well as from collateralized clients’ derivatives trading. Also includes unsecured
lending, i.e. recourse-based lending and cash-flow-based corporate lending to entities owned and controlled
by UBS AG’s Global Wealth Management clients.
Limited contribution to
market risk
rate risk in the banking book related to Global Wealth Management is transferred to and managed by Group
Treasury.
Personal & Corporate Banking
Credit risk
lending, commodity trade finance, trade and export finance, consumer finance, and lending to banks and
other regulated clients, as well as a small amount of derivatives trading activity.
Minimal contribution to
market risk
. Interest rate risk in the banking book related to Personal & Corporate
Banking is transferred to and managed by Group Treasury.
Asset Management
Limited exposure to
credit risk
market risk
investments in funds managed by Asset Management.
Indirect exposure to credit risk and market risk from client assets invested in Asset Management funds, which
can adversely impact management and performance fees and cause heightened fund outflows and liquidity
risk.
Investment Bank
Credit risk
credit risk from derivatives trading and securities financing.
Market risk
Non-core and Legacy
Credit risk
with residential and commercial real estate collateral and a small number of trades remaining from a
corporate loan portfolio.
Market risk
rate and equity derivative transactions.
Group functions
Credit risk
,
market risk
treasury risk
sheet (asset and liability management), capital, profit or loss, and liquidity and funding.
All the business divisions and Group functions are exposed to
country risk, sustainability and climate risk
non-financial risk
. Non-financial risk is an
inevitable consequence of being an operating firm and can arise as a result of UBS AG’s past and current business activities.
Risk oversight
Risk governance
The risk governance of UBS AG is modeled on that of the UBS Group, with the same three lines of defense and equal
governance structure in terms of key roles and responsibility for risk management.
›
Refer to “Risk governance” in the “Risk management and control” section of the UBS Group Annual Report 2025, available under
“Annual reporting” at
ubs.com/investors,
Internal risk reporting
Comprehensive and transparent reporting of risks is central to our risk governance framework’s control and oversight
responsibilities and required by our risk management and control principles. Accordingly, risks are reported at a frequency
and level of detail commensurate with the extent and variability of the risk and the needs of the various governance
bodies, regulators and risk authority holders. Data used to produce risk reports is generally aligned with that used by
both the business divisions and control functions for managing and monitoring risks. This alignment ensures consistency
in risk assessment and decision-making across the organization.
As UBS AG’s risk profile is closely aligned to that of the UBS Group, it relies on the internal risk reporting framework for
the Group to cover the reporting for UBS AG.
The Group Risk Report provides a detailed qualitative and quantitative monthly overview of developments in financial
and non-financial risks at the firm-wide level, including the status of our risk appetite objectives and the results of firm-
wide stress testing. The Group Risk Report is distributed internally to the Board of Directors (BoD), the Executive Board
(EB), and senior members of Risk Control, Internal Audit, Finance and Legal. Risk reports are also produced covering
significant Group entities and branches (i.e. entities and branches subject to enhanced standards of corporate
governance), which also include significant entities and branches of UBS AG.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 58
Monthly business division and Group Items risk reports are supplemented with daily or weekly reports, at various levels
of granularity, covering market, credit and treasury risks to enable risk officers and senior management to monitor and
control the Group’s risk profile.
UBS AG’s internal risk reporting covers financial and non-financial risks and is supported by risk data and measurement
systems that are used for risk management and monitoring purposes and also for external disclosure and regulatory
reporting. Dedicated units within Risk Control assume responsibility for measurement, analysis and reporting of risk and
for overseeing the quality and integrity of risk-related data. The firm’s risk data and measurement systems are subject to
periodic review by Internal Audit, which applies a risk-based audit approach.
Risk appetite framework
Our risk appetite is defined at the aggregate Group level and reflects the risk that we are willing to accept or wish to
avoid. It is set via complementary qualitative and quantitative risk appetite statements defined at a firm-wide level and is
embedded throughout our business divisions and legal entities by Group, business division and legal entity policies, limits
and authorities. Our risk appetite is reviewed and recalibrated annually, with the aim of ensuring that risk-taking at every
level of the organization is in line with our strategic priorities, our capital and liquidity plans, our
Pillars, Principles and
Behaviors
, and minimum regulatory requirements. It is governed by a single overarching policy and conforms to the
Financial Stability Board’s Principles for an Effective Risk Appetite Framework. The “Risk appetite framework” chart below
shows the key elements of the framework.
Risk principles and risk culture
Qualitative risk appetite statements aim to ensure we maintain the desired risk culture. Maintaining a strong risk culture
is a prerequisite for success in today’s highly complex operating environment and a source of sustainable competitive
advantage.
Our risk appetite framework combines all the important elements of our risk culture, expressed in our
Pillars, Principles
and Behaviors
, our risk management and control principles, our Code of Conduct and Ethics, and our Total Reward
Principles. They help to create a solid foundation for promoting risk awareness, leading to appropriate risk-taking and
the establishing of robust risk management and control processes.
›
Refer to “Employees” in the “Our stakeholders” section of the UBS Group Annual Report 2025, available under “Annual reporting”
at
ubs.com/investors
, for more information about our Pillars, Principles and Behaviors
›
Refer to the Code of Conduct and Ethics of UBS, available at
ubs.com/code
, for more information
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 59
Risk management and control principles
Protection of financial strength
Protecting UBS AG’s financial strength by controlling its risk exposure and avoiding potential risk concentrations
at individual exposure levels, at specific portfolio levels and at an aggregate firm-wide level across all risk types.
Protection of reputation
Protecting UBS AG’s reputation through a sound risk culture characterized by a holistic and integrated view of
risk, performance and reward, and through full compliance with its standards and principles, particularly its
Code of Conduct and Ethics.
Business management accountability
Maintaining management accountability, whereby business management owns all risks assumed throughout
UBS AG and is responsible for the continuous and active management of all risk exposures to provide for
balanced risk and return.
Independent controls
Independent control functions that monitor the effectiveness of the businesses’ risk management and oversee
risk-taking activities.
Risk disclosure
Disclosure of risks to senior management, the BoD, investors, regulators, credit rating agencies and other
stakeholders with an appropriate level of comprehensiveness and transparency.
Quantitative risk appetite objectives
These objectives are complemented by a standardized set of quantitative non-financial risk appetite objectives at Group
level, expressed as percentages of the monetary impacts from non-financial risk events relative to total revenue and
operational risk regulatory capital, respectively. If these percentages are exceeded, a review of key loss drivers and required
mitigation measures is triggered.
Risk appetite statements at the business-division level are derived from the firm-wide risk appetite. They may also include
business-division-specific strategic goals related to that business division’s activities and risks. Risk appetite statements
are also set for certain legal entities, which must be consistent with the firm-wide risk appetite framework and approved
in accordance with Group and legal entity regulations. Differences may exist that reflect the specific nature, size,
complexity and regulations applicable to the relevant legal entity.
Portfolio and position limits
With the risk profile of UBS AG closely aligned to that of the Group, we ensure that UBS AG’s risk exposure remains
within the desired risk capacity through a comprehensive suite of risk portfolio limits set at Group level.
›
Refer to “Credit risk” in this section for more information about counterparty limits
Risk measurement
Audited |
We apply a variety of methodologies and measurements to quantify the risks of our portfolios and potential risk
concentrations. Risks that are not fully reflected within standard measures are subject to additional controls, which may
include preapproval of specific transactions and the application of specific restrictions. Models to quantify risk are
generally developed by dedicated units within control functions and are subject to independent validation.
›
Refer to “Credit risk”, “Market risk” and “Non-financial risk” in this section for more information about model confirmation
procedures
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Risk, capital, liquidity and funding, and balance sheet | Risk management and control 60
Stress testing
We perform stress testing to estimate losses that could result from extreme yet plausible macroeconomic and geopolitical
stress events to identify, better understand and manage our potential vulnerabilities and risk concentrations. Stress testing
has a key role in our limits framework at the firm-wide, business division, legal entity and portfolio levels. Stress test
results are regularly reported to the BoD and the EB. We also provide detailed stress loss analyses to the Swiss Financial
Market Supervisory Authority (FINMA) and regulators of our legal entities in accordance with their requirements. As
described in “Risk appetite framework”, stress testing has a central role in our risk appetite and business planning
processes.
The combined stress-testing (CST) framework is scenario based and aims to quantify overall firm-wide impacts that could
result from various potential global systemic events. The framework captures all material risks, as covered in “Risk
categories”, to the extent the risk is consistent with the narrative and main assumptions of the framework.
Scenarios are forward looking and encompass macroeconomic and geopolitical stress events calibrated to different levels
of severity. In each scenario, we assume changes in a wide range of macroeconomic and market variables to stress the
key risk drivers of our portfolios. We also capture the business risk resulting from lower fee, interest and trading income
net of lower expenses. These effects are measured for all businesses and material risk types to calculate the aggregate
estimated effect of the given scenario on profit or loss, other comprehensive income, risk-weighted assets, the leverage
ratio denominator and, ultimately, capital and leverage ratios. The assumed changes in macroeconomic and market
variables are updated periodically to account for changes in the current and possible future market environment.
At least once a year, the Risk Committee approves the most relevant scenario, known as the binding scenario, for use as
the main scenario for regular CST reporting and for monitoring risk exposure against our minimum capital, earnings and
leverage ratio objectives in our risk appetite framework. In 2025, the binding scenario for CST was the internal
global
crisis
scenario
. This scenario assumes a fall in global trade, which particularly hits China and leads to a hard landing.
Combined with political, solvency and liquidity concerns, this results in a sharp sell-off of emerging markets sovereign
debt and some emerging markets default. The macroeconomic and market impacts amplify concerns about peripheral
European sovereign debt, causing Greece and Cyprus to default.
From the beginning of 2026 the binding scenario for CST has changed to the global trade war scenario. This scenario
assumes heightened geopolitical tensions and explores tail risks concerning US protectionist policies and retaliation by
the US’s trading partners. US policies solidify Switzerland as a safe-haven country and the US dollar depreciates against
the Swiss franc. The scenario assumes that disruptions in global trade contribute to rising inflation and a large economic
contraction. Despite rising inflation, the Federal Reserve makes measured interest rate cuts, and other major central banks
in advanced economies follow the same course.
With regard to treasury risk, we routinely analyze the effect of movements in interest rates and changes in the structure
of yield curves. We also perform stress testing to determine the optimal asset and liability structure, enabling us to
maintain an appropriately balanced liquidity and funding position under various scenarios. These scenarios differ from
those outlined above, because they focus on specific situations that could generate liquidity and funding stress, as
opposed to the scenarios used in the CST framework, which focus on the effect on profit or loss and capital.
›
Refer to “Credit risk” and “Market risk” in this section for more information about stress loss measures
›
Refer to the “Capital management” and “Liquidity and funding management” sections of this report for more information about
stress testing
›
Refer to “Note 19 Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more
information about scenarios used for expected credit loss measurement
Risk concentrations
Audited |
Risk concentrations may exist where one or several positions within or across different risk categories could result
in significant losses relative to UBS AG’s financial strength. Identifying such risk concentrations and assessing their
potential impact is a critical component of our risk management and control process.
For financial risks, we consider a number of elements, such as shared characteristics of positions, the size of the portfolio
and the sensitivity of positions to changes in the underlying risk factors. We take into account direct exposure from credit
and issuer risk, as well as indirect exposures, such as reliance on collateral. Also important in our assessment is the liquidity
of the markets where the positions are traded, as well as the availability and effectiveness of hedges or other potential
risk-mitigating factors. Particular attention is given to identification of wrong-way risk and risk on risk. Wrong-way risk is
defined as a positive correlation between the size of the exposure and the likelihood of a loss. Risk on risk refers to a
situation where a position and its risk mitigation can be impacted by the same event.
For non-financial risks, risk concentrations may result from, for example, a single non-financial risk issue that is large on
its own (i.e. it has the potential to produce a single high-impact loss or a number of losses that together are high impact)
or related non-financial risk issues that may link together to create a high impact. For example, UBS AG considers the
level of risk arising from concentration to a single counterparty, subcontractor or country in connection with the
management of third-party risk.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 61
Risk concentrations are subject to increased oversight by Group Risk Control and Group Compliance and Operational
Risk Control, and assessed to determine whether they should be reduced or mitigated, depending on the available means
to do so. It is possible that material losses could occur on financial or non-financial risks, particularly if the correlations
that emerge in a stressed environment differ markedly from those envisaged by risk models.
›
Refer to
“
Credit risk
”
“
Market risk
”
concentrations are monitored and mitigated
›
Refer to the
“
Risk factors
”
Credit risk
Audited |
Main sources of credit risk
–
In Global Wealth Management, credit risk arises from collateralized lending, primarily against securities, residential and
commercial real estate, other real assets (such as ships and aircraft), private market and hedge fund interest, and
investors’ uncalled capital commitments, as well as from collateralized clients’ derivatives trading. In addition, credit
risk also arises from unsecured lending, i.e. recourse-based lending and cash-flow-based corporate lending to entities
owned and controlled by our Global Wealth Management clients.
–
A substantial portion of our credit risk arises from Personal & Corporate Banking’s lending exposure, including
mortgage loans, secured mainly by owner-occupied properties and income-producing real estate, as well as corporate
loans, that depends on the performance of the Swiss economy and real estate market.
–
The Investment Bank’s credit risk arises mainly from lending, derivatives trading and securities financing. Derivatives
trading and securities financing are mainly investment grade. Loan underwriting activity can be lower rated and gives
rise to temporary concentrated exposure.
–
Credit risk in Non-core and Legacy relates to a residual portfolio of less-liquid structured financing transactions,
including some with residential and commercial real estate collateral and a small number of trades remaining from a
corporate loan portfolio.
Audited |
Overview of measurement, monitoring and management techniques
–
Credit risk from transactions with individual counterparties is based on our estimates of probability of default (PD),
exposure at default (EAD) and loss given default (LGD). Limits are established for individual counterparties and groups
of related counterparties covering banking and traded products, and for settlement amounts. Risk authorities are
approved by the Board of Directors and are delegated to the President of the Executive Board, the Chief Risk Officer
(the CRO) and divisional CROs, based on risk exposure amounts, internal credit rating and potential for losses.
–
Limits apply not only to the current outstanding amount but also to contingent commitments and the potential future
exposure of traded products.
–
The Investment Bank monitoring, measurement and limit framework distinguishes between exposures intended to be
held to maturity (take-and-hold exposures) and those intended for distribution or risk transfer (temporary exposures).
–
We use models to derive portfolio credit risk measures of expected loss, statistical loss and stress loss at firm-wide and
business division levels, and to establish portfolio limits.
–
Credit risk concentrations can arise if clients are engaged in similar activities, located in the same geographical region
or have comparable economic characteristics, e.g. if their ability to meet contractual obligations would be similarly
affected by changes in economic, political or other conditions. To avoid credit risk concentrations, we establish limits
and operational controls that constrain risk concentrations at portfolio, sub-portfolio or counterparty levels for sector
exposure, country risk exposure and specific product exposures.
Credit risk profile of UBS AG
Internally, we classify credit risk exposures into two broad categories: banking products and traded products. Banking
products include drawn loans, guarantees and loan commitments, amounts due from banks, balances at central banks,
and other financial assets at amortized cost. Traded products include over-the-counter (OTC) derivatives, exchange-traded
derivatives (ETD) and securities financing transactions (SFTs), which consist of securities borrowing and lending, and
repurchase and reverse repurchase agreements.
The exposures detailed in this section are based on management’s view of credit risk, which differs in certain respects
from the requirements of IFRS Accounting Standards.
›
Refer to “Note 1 Summary of material accounting policies” in the “Consolidated financial statements” section of this report for
more information about our accounting policy for allowances and provisions for ECL
›
Refer to “Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement” and
“Note 19 Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more
information about ECL measurement requirements under IFRS
Accounting Standards
›
Refer to “Note 13 Other assets” in the “Consolidated financial statements” section of this report for more information about other
assets at amortized cost
›
Refer to “Note 21 Offsetting financial assets and financial liabilities” in the “Consolidated financial statements” section of this
report for more information about UBS AG’s traded products exposure
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 62
Banking products
Banking products exposure in our business divisions and Group Items
31.12.25
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products exposure, gross
1,2
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and irrevocable loan commitments (off-balance sheet)
Committed unconditionally revocable credit lines
3
Total credit-impaired exposure, gross
1
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
31.12.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products exposure, gross
1,2
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and irrevocable loan commitments (off-balance sheet)
Committed unconditionally revocable credit lines
3
Total credit-impaired exposure, gross
1
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
1 IFRS 9 gross exposure for banking products includes the following financial instruments in scope of expected credit loss requirements: balances at central banks, amounts due from banks, loans and advances to
customers, other financial assets at amortized cost, guarantees and irrevocable loan commitments. 2 Internal management view of credit risk, which differs in certain respects from IFRS Accounting Standards.
3 Commitments that can be canceled by UBS AG at any time but expose UBS AG to credit risk if the client has the ability to draw the facility before UBS AG can take action. These commitments are subject to expected
credit loss requirements.
Global Wealth Management, Personal & Corporate Banking, and Investment Bank: banking products exposure, by
internal UBS ratings
1,2
USD m, except where indicated
31.12.25
31.12.24
Investment
grade /
Rating
1–5
Sub-investment grade
Defaulted /
Credit-
impaired
Banking
products
exposure,
gross
Investment
grade /
Rating
1–5
Sub-investment grade
Defaulted /
Credit-
impaired
Banking
products
exposure,
gross
Business divisions
Rating
6–9
Rating
10–13
Rating
6–9
Rating
10–13
Global Wealth Management
294,141
54,819
4,480
1,770
355,210
278,566
46,912
2,166
1,421
329,065
Personal & Corporate Banking
229,664
124,328
12,193
4,486
370,670
229,372
84,758
8,601
4,187
326,918
Investment Bank
29,632
19,039
16,446
642
65,759
26,357
16,699
15,588
595
59,239
1 Excluding balances at central banks and Group Treasury reallocations. 2 The ratings of the major credit rating agencies, and their mapping to our internal rating scale, are shown in the “Internal UBS rating scale
and mapping of external ratings” table in this section.
Global Wealth Management
Gross banking products exposure increased by USD 28bn to USD 482bn as of 31 December 2025, predominantly due to
the weakening of the US dollar against other major currencies and also due to net new loans. Our Global Wealth
Management loan portfolio is mainly secured by a diversified portfolio of securities (standard Lombard loans) and by
residential real estate.
As of 31 December 2025, 94% of our USD 184bn of standard Lombard loans, including traded products collateralized
by securities, were rated as investment grade based on our internal ratings. Moreover, standard Lombard loans are
typically uncommitted, short-term in nature and can be canceled immediately if the collateral quality deteriorates and
margin calls are not met. Lending values in the Lombard book are derived by applying discounts (haircuts) to the pledged
collateral’s market value in line with a possible adverse change in market value over a given close-out period and
confidence level. Less-liquid or more volatile collateral will typically have larger haircuts. In 2025, the standard Lombard
book, including traded products, grew by approximately 11%.
The residential real estate portfolio increased by approximately 6% in 2025, mainly driven by our Swiss mortgage book,
in line with the weakening of the US dollar against the Swiss franc by 15% over the course of 2025.
Specialized financings as of 31 December 2025 totaled USD 59bn, including traded products. This portfolio mainly
consists of non-standard Lombard lending, commercial real estate loans, financing for ships, yachts and aircraft,
unsecured lending, and loans collateralized with uncalled capital commitments. These financings decreased by
approximately 6% in 2025, largely due to the wind down of non-strategic portfolios.
›
Refer to “Lending secured by real estate” and “Lombard lending” in this section for further information about these types of
lending
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 63
Collateralization of Loans and advances to customers
1
Global Wealth Management
Personal & Corporate Banking
USD m, except where indicated
31.12.25
31.12.24
31.12.25
31.12.24
Secured by collateral
Residential real estate
Commercial / industrial real estate
Cash
Equity and debt instruments
Other collateral
2
Subject to guarantees
Uncollateralized and not subject to guarantees
Total loans and advances to customers, gross
Allowances
Total loans and advances to customers, net of allowances
Collateralized loans and advances to customers as a percentage of total loans and advances to customers, gross (%)
1 Collateral arrangements generally incorporate a range of collateral, including cash, equity and debt instruments, real estate, and other collateral. For the purpose of this disclosure, UBS AG applies a risk-based
approach that generally prioritizes collateral according to its liquidity profile. In the case of loan facilities with funded and unfunded elements the collateral is first allocated to the funded element. For legacy Credit
Suisse infrastructure a risk-based approach is applied that generally prioritizes real estate collateral and prioritizes other collateral according to its liquidity profile. In the case of loan facilities with funded and unfunded
elements the collateral is proportionately allocated. 2 Includes but is not limited to life insurance contracts, rights in respect of subscription or capital commitments from fund partners, inventory, gold and other
commodities.
Personal & Corporate Banking
Gross banking products exposure increased by USD 37bn to USD 465bn as of 31 December 2025, predominantly due
to the weakening of the US dollar against the Swiss franc and net new loans.
The exposure is mainly driven by our Swiss mortgage portfolio, our Swiss corporate banking portfolio and, to a lesser
extent, our commodity trade finance portfolio. As of 31 December 2025, the majority of the banking products exposure
was rated investment grade, and 90% of loans and advances to customers were secured by collateral, mainly residential
and commercial property. The total unsecured amount mainly consists of cash-flow-based lending to corporate
counterparties.
Our Swiss corporate banking products take-and-hold portfolio exposure increased by USD 2bn to USD 75bn (CHF 59bn)
as of 31 December 2025, primarily reflecting the appreciation of the Swiss franc against the US dollar, partly offset by
negative net new loans. The portfolio consists of loans, guarantees and loan commitments to multi-national and domestic
counterparties. The small and medium-sized entity portfolio, in particular, is well diversified across industries. However,
such companies are reliant on the domestic economy and the economies to which they export, in particular the EU and
the US.
Our commodity trade finance portfolio focuses on energy and base-metal trading companies, where the related
commodity price risk is hedged to a large extent by the commodity trader. The majority of limits in this business are
uncommitted, transactional and short-term in nature. Our portfolio size was USD 9bn (CHF 7bn) as of 31 December
2025, compared with USD 9bn (CHF 8bn) as of 31 December 2024. A considerable part of the exposure correlates with
commodity prices.
Swiss mortgage loan portfolio
Our Swiss mortgage loan portfolio secured by residential and commercial real estate in Switzerland continued to be our
largest loan portfolio. These mortgage loans (including loans on owner-occupied commercial real estate, also included in
the aforementioned Swiss corporate banking products exposure), amounting to USD 362bn (CHF 287bn) as of
31 December 2025, mainly originated from Personal & Corporate Banking, with contributions also from Global Wealth
Management Region Switzerland.
Of the aggregate amount of Swiss residential mortgages, 99.9% would continue to be covered by the real estate
collateral even if the collateral value were to decrease 20%, and more than 99% would remain covered by the real estate
collateral if the collateral value were to decrease 30%.
›
Refer to “Credit risk mitigation” in this section for more information about lending secured by real estate
Swiss mortgages: exposure by exposure segments and loan-to-value (LTV) buckets
1
USD bn, except where indicated
31.12.25
31.12.24
LTV buckets
Exposure segment
≤30%
31–50%
51–60%
61–70%
71–80%
81–100%
>100%
Total
Total
Residential mortgages
Exposure
187.2
74.4
16.0
6.1
1.6
0.2
0.1
285.5
237.6
Income-producing real estate
Exposure
36.7
13.5
2.5
0.8
0.2
0.1
0.0
53.9
57.7
Corporates
Exposure
12.2
4.4
1.0
0.5
0.2
0.1
0.1
18.3
15.7
Other segments
Exposure
2.8
1.0
0.2
0.1
0.1
0.0
0.0
4.2
2.2
Mortgage-covered exposure
Exposure
238.8
93.3
19.7
7.5
2.0
0.4
0.2
361.9
313.2
as a percentage of total
66
26
5
2
1
0
0
100
100
Mortgage-covered exposure 31.12.24
Exposure
206.0
80.0
17.7
6.9
1.9
0.5
0.3
313.2
as a percentage of total
66
26
6
2
1
0
0
100
1 The amount of each mortgage loan is allocated across the LTV buckets to indicate the portion at risk at the various value levels shown; for example, a loan of 75 with an LTV ratio of 75% (i.e. a collateral value of
100) would result in allocations of 30 in the ≤30% LTV bucket, 20 in the 31–50% bucket, 10 in the 51–60% bucket, 10 in the 61–70% bucket and 5 in the 71–80% bucket.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 64
Investment Bank
The Investment Bank’s lending activities are largely associated with corporate and non-bank financial institutions. The
business is broadly diversified across industry sectors but concentrated in North America.
Gross banking products exposure increased by USD 36bn to USD 109bn as of 31 December 2025, due to an increase in
balances at central banks and, to a lesser extent, due to a rise in all other banking products. The banking products
exposure is almost equally distributed between investment grade and sub-investment grade rating, with a slight
predominance of the latter.
Mandated loan underwriting commitments on a notional basis were USD 5.9bn as of 31 December 2025 (31 December
2024: USD 4.6bn), reflecting new mandates during the year. As of 31 December 2025, USD 0.4bn of these commitments
had not yet been distributed as originally planned. Of the USD 4.6bn loan underwriting commitments reported as of the
end of 2024, an amount of USD 4.5bn was syndicated or canceled in 2025.
Loan underwriting exposures are classified as held for trading, with fair values reflecting the market conditions at the end
of 2025. Credit hedges are in place to help protect against fair value movements in the portfolio.
›
Refer to “Credit risk models” in this section for more information about rating grades and rating agency mappings
Investment Bank: banking products exposure, by geographical region
1
31.12.25
31.12.24
USD m
%
USD m
%
Asia Pacific
7,189
10.9
5,821
9.8
Latin America
732
1.1
778
1.3
Middle East and Africa
759
1.2
392
0.7
North America
39,768
60.5
37,567
63.4
Switzerland
507
0.8
132
0.2
Rest of Europe
16,803
25.6
14,550
24.6
Exposure
65,759
100.0
59,239
100.0
1 Excluding balances at central banks and Group Treasury reallocations.
Investment Bank: banking products exposure, by industry sector
1
31.12.25
31.12.24
2
USD m
%
USD m
%
Banks
1,799
2.7
1,419
2.4
Electricity, gas, water supply
499
0.8
634
1.1
Financial institutions, excluding banks
3
33,226
50.5
26,774
45.2
Manufacturing
4
7,951
12.1
9,085
15.3
Mining
849
1.3
1,461
2.5
Public authorities
14
0.0
12
0.0
Real estate and construction
2,398
3.6
2,070
3.5
Retail and wholesale
4,722
7.2
3,375
5.7
Technology and communications
7,114
10.8
7,330
12.4
Transport and storage
954
1.5
869
1.5
Other
5
6,232
9.5
6,211
10.5
Exposure
65,759
100.0
59,239
100.0
1 Excluding balances at central banks and Group Treasury reallocations. 2 Comparative-period information has been restated to reflect changes in industry classification. 3 Includes central counterparties.
4 Includes the chemicals industry. 5 Includes other business services, health and social services, as well as other minor industries.
Non-core and Legacy
Gross banking products exposure decreased by USD 24bn to USD 9bn as of 31 December 2025, mainly due to a decrease
in high-quality liquid asset requirements, in combination with the ongoing de-risking of the portfolio.
›
Refer to “Balance sheet assets” in the “Balance sheet and off-balance sheet” section of this report for more information
›
Refer to the “Our businesses” section of this report for more information
›
Refer to the “Non-core and Legacy” section of this report for more information
Group Items
Gross banking products exposure, which arises primarily in connection with treasury activities, increased by USD 5bn to
USD 25bn as of 31 December 2025, predominantly driven by increases in guarantees and irrevocable loan commitments.
›
Refer to “Balance sheet assets” in the “Balance sheet and off-balance sheet” section of this report for more information
›
Refer to the “Group Items” section of this report for more information
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 65
Traded products
Audited |
Counterparty credit risk (CCR) arising from traded products, which include OTC derivatives, ETD exposures and
SFTs originating in the Investment Bank, Non-core and Legacy, and Group Treasury, is generally managed on a close-out
basis, as well as a stressed basis. This takes into account possible effects of market movements on the exposure and any
associated collateral over the time it would take to close out our positions. Limits are applied to the potential future and
stressed exposure per counterparty, with the size of the limit dependent on the counterparty’s creditworthiness (as
determined by Risk Control). Limit frameworks are also used to control overall exposure to specific sectors. Such portfolio
limits are monitored and reported to senior management.
Trading in OTC derivatives is conducted through central counterparties where practicable or required. Where central
counterparties are not used, we have clearly defined policies and processes for trading on a bilateral basis. Trading is
typically conducted under bilateral International Swaps and Derivatives Association agreements or similar master netting
agreements, which generally permit close-out and netting of transactions in case of default, subject to applicable law.
For certain counterparties, initial margin is taken to cover some or all of the calculated close-out and / or stressed
exposure. This is in addition to the variation margin taken to settle changes in market value of transactions. For most
major market participant counterparties, we use two-way collateral agreements under which either party can be required
to provide collateral in the form of cash or marketable securities when the exposure exceeds specified levels. Non-cash
collateral typically consists of well-rated government debt or other collateral acceptable to Risk Control and permitted by
applicable regulations.
In the tables below, OTC derivatives exposures are generally presented as net positive replacement values after the
application of legally enforceable netting agreements and the deduction of cash and marketable securities held as
collateral. SFT exposures are reported taking into account collateral received, and ETD exposures take into account
collateral margin calls.
›
Refer to “Note 10 Derivative instruments” in the “Consolidated financial statements” section of this report for more information
about OTC derivatives settled through central counterparties
›
Refer to “Note 21 Offsetting financial assets and financial liabilities” in the “Consolidated financial statements” section of this
report for more information about the effect of netting and collateral arrangements on derivative exposures
Investment Bank, Non-core and Legacy, and Group Treasury: traded products exposure, by internal UBS ratings
1
USD m, except where indicated
31.12.25
31.12.24
Investment
grade /
Rating
1–5
Sub-investment grade
Defaulted /
Credit-
impaired
Traded
products
exposure,
net
2
Investment
grade /
Rating
1–5
Sub-investment grade
Defaulted /
Credit-
impaired
Traded
products
exposure,
net
2
Product
Rating
6–9
Rating
10–13
Rating
6–9
Rating
10–13
OTC derivatives
7,856
849
16
14
8,735
16,266
841
40
211
17,357
ETD
8,380
147
0
0
8,526
10,245
109
0
0
10,353
SFTs
18,022
463
0
0
18,486
18,063
289
0
0
18,352
Traded products exposure, net
2
34,258
1,459
16
14
35,747
44,573
1,239
40
211
46,062
1 The ratings of the major credit rating agencies, and their mapping to our internal rating scale, are shown in the “Internal UBS rating scale and mapping of external ratings” table in this section. 2 After credit
valuation adjustments and hedges.
Investment Bank, Non-core and Legacy, and Group Treasury: net OTC derivatives and SFT exposure, by geographical
region
Net OTC derivatives exposure
Net SFT exposure
31.12.25
31.12.24
31.12.25
31.12.24
USD m
%
USD m
%
USD m
%
USD m
%
Asia Pacific
1,337
15.3
5,126
29.5
2,834
15.3
2,307
12.6
Latin America
46
0.5
88
0.5
59
0.3
27
0.1
Middle East and Africa
248
2.8
111
0.6
958
5.2
511
2.8
North America
3,066
35.1
4,165
24.0
5,009
27.1
4,946
27.0
Switzerland
1,070
12.3
2,522
14.5
570
3.1
494
2.7
Rest of Europe
2,968
34.0
5,345
30.8
9,056
49.0
10,066
54.9
Exposure
8,735
100.0
17,357
100.0
18,486
100.0
18,352
100.0
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 66
Investment Bank, Non-core and Legacy, and Group Treasury: net OTC derivatives and SFT exposure, by industry sector
Net OTC derivatives exposure
Net SFT exposure
31.12.25
31.12.24
1
31.12.25
31.12.24
1
USD m
%
USD m
%
USD m
%
USD m
%
Banks
969
11.1
1,914
11.0
4,642
25.1
5,808
31.6
Electricity, gas, water supply
111
1.3
132
0.8
3
0.0
2
0.0
Financial institutions, excluding banks
2
6,940
79.4
14,454
83.3
13,191
71.4
11,883
64.8
Manufacturing
3
65
0.7
34
0.2
0
0.0
1
0.0
Mining
125
1.4
58
0.3
1
0.0
0
0.0
Public authorities
335
3.8
391
2.3
551
3.0
542
3.0
Real estate and construction
8
0.1
144
0.8
0
0.0
0
0.0
Retail and wholesale
35
0.4
9
0.1
0
0.0
0
0.0
Technology and communications
25
0.3
38
0.2
0
0.0
0
0.0
Transport and storage
65
0.7
22
0.1
0
0.0
1
0.0
Other
58
0.7
160
0.9
97
0.5
114
0.6
Exposure
8,735
100.0
17,357
100.0
18,486
100.0
18,352
100.0
1 Comparative-period information has been restated to reflect changes in industry classification. 2 Includes central counterparties. 3 Includes the chemicals industry.
Credit risk mitigation
Audited |
UBS AG manages credit risk in its portfolios by taking collateral against exposures and by utilizing credit hedging.
Lending secured by real estate
Audited |
UBS AG uses a scoring model as part of a standardized front-to-back process for credit decisions on originating or
modifying Swiss mortgage loans. The model’s two key factors are the LTV ratio and an affordability calculation.
The calculation of affordability takes into account interest payments, minimum amortization requirements and potential
property maintenance costs in relation to gross income or rental income for rental properties. The imputed interest rate
is set at 5% per annum, independently of the current interest rate environment.
For residential properties occupied by the borrower, the maximum LTV for the standard approval process is 80%. For
income-producing real estate (IPRE), the maximum LTV allowed within the standard approval process ranges from 40%
to 80%, depending on the type and age of the property.
Audited |
The value UBS AG assigns to each property is an estimate based on model-derived valuations, the purchase price
and, depending on the property type and ownership purpose, a valuation at cost. In some cases, an additional external
valuation is considered.
To take market developments into account for external valuation models, an external vendor regularly updates the
parameters and / or refines the architecture for each model. Model changes and parameter updates are subject to the
same validation procedures as our internally developed models.
Audited |
UBS AG similarly applies underwriting guidelines for its Global Wealth Management Region Americas mortgage
loan portfolio, taking into account loan affordability and collateral sufficiency. LTV standards are defined for the various
mortgage types, such as residential mortgages or investment properties, based on associated risk factors, such as property
type and loan size and purpose. The maximum LTV allowed within the standard approval process ranges from
% to
%. In addition to LTV, other credit risk metrics, such as debt-to-income ratios, credit scores and required client reserves,
are also part of our underwriting guidelines.
A risk limit framework is applied to the Global Wealth Management Region Americas mortgage loan portfolio. Limits are
set to govern exposures within LTV categories, geographic concentrations, portfolio growth and high-risk mortgage
segments, such as interest-only loans. These limits are monitored by a specialized credit risk monitoring team and reported
to senior management. Supplementing this limit framework is a real estate lending policy and procedures framework,
set up to govern real estate lending activities. Quality assurance and quality control programs monitor compliance with
mortgage underwriting and documentation requirements.
For UBS AG’s mortgage loan portfolio in the Global Wealth Management regions of EMEA and Asia Pacific, global
underwriting guidelines with regional variations are applied to allow for regulatory and market differentials. As in other
regions, the underwriting guidelines take into account affordability and collateral sufficiency. Affordability is assessed at
a stressed interest rate using, for residential real estate, the borrowers’ sustainable income and declared liabilities, and
for commercial real estate the quality and sustainability of rental income. For interest-only loans, a declared and evidenced
repayment strategy must be in place. The applicable LTV for each mortgage is based on the quality and liquidity of the
property and assessed against valuations from bank-appointed third-party valuers. Maximum LTV varies from
% to
%, depending on the type and location of the property, as well as other factors. Serviceability may be further supported
by personal guarantees from related third parties. The overall portfolio is centrally assessed against a number of stress
scenarios to ensure that exposures remain within predefined stress limits.
›
Refer to “Swiss mortgage loan portfolio” in this section for more information about LTV in the Swiss mortgage portfolio
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 67
Lombard lending
Audited |
Lombard loans are secured by pledges of marketable securities, guarantees and other forms of collateral. Eligible
financial securities are primarily liquid and actively traded transferable securities (such as bonds, equities and certain
hybrid securities), and other transferable securities, such as approved structured products for which regular prices are
available and the issuer of the security provides a market. To a lesser degree, less-liquid collateral is also used.
UBS AG derives lending values by applying discounts (haircuts) to the pledged collateral’s market value. Haircuts for
marketable securities are calculated to cover a possible adverse change in market value over a given close-out period and
confidence level. Less-liquid or more volatile collateral will typically have larger haircuts.
UBS AG assess its concentration and correlation risks across collateral posted at a counterparty level, and at a divisional
level across counterparties. It also performs targeted firm-wide reviews of concentration. Concentration of collateral in
single securities, issuers or issuer groups, industry sectors, countries, regions or currencies may result in higher risk and
reduced liquidity. In such cases, the lending value of the collateral, margin call and close-out levels are adjusted
accordingly.
Exposures and collateral market values are monitored daily, with the aim of ensuring that the credit exposure always
remains within the established risk tolerance. A shortfall occurs when the lending value drops below the exposure; if it
exceeds a defined trigger level, a margin call is initiated, requiring the client to provide additional collateral, reduce the
exposure or take other action to bring exposure in line with the agreed lending value of the collateral. If a shortfall is not
corrected within the required period, a close-out is initiated, through which collateral is liquidated, open derivative
positions are closed and guarantees are called.
UBS AG conducts stress testing of collateralized exposures to simulate market events that reduce collateral market value,
increase exposure of traded products, or do both. For certain classes of counterparties, limits on such calculated stress
exposures are applied and controlled at a counterparty level. Also, portfolio limits are applied across certain businesses or
collateral types.
›
Refer to “Stress loss” in this section for more information about our stress testing
Credit hedging
Audited |
UBS AG uses single-name credit default swaps (CDSs), credit-index CDSs, structured portfolio hedges (SPHs),
bespoke protection and other instruments to actively manage credit risk. The aim is to reduce concentrations of risk from
specific counterparties, sectors or portfolios and, for CCR, the profit or loss effect arising from changes in credit valuation
adjustments.
UBS AG has guidelines with regard to taking credit hedges into account for credit risk mitigation purposes. For example,
when monitoring exposures against counterparty limits, UBS AG does not usually apply certain credit risk mitigants, such
as proxy hedges (credit protection on a correlated but different name) or credit-index CDSs, to reduce counterparty
exposures. SPHs are structured to achieve true risk transfer by providing explicit protection against events that could cause
a loss in the referenced hedged positions, with the hedge payoff matched to the actual loss incurred on those positions
(i.e. no basis risk). Buying credit protection, if unfunded, also creates credit exposure with regard to the protection
provider. UBS AG monitors and limits exposures to credit protection providers and also monitors the effectiveness of
credit hedges.
›
Refer to “Note 10 Derivative instruments” in the “Consolidated financial statements” section of this report for more information
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors,
for more information
about risk transfer through synthetic securitizations
Mitigation of settlement risk
To mitigate settlement risk, UBS AG reduces its actual settlement volumes by using multi-lateral and bilateral agreements
with counterparties, including payment netting. In relation to the exchange of cash or securities, transactions can be
settled on a delivery-versus-payment basis.
Foreign exchange transactions are UBS AG’s most significant source of settlement risk. UBS AG is a member of
CLSSettlement (operated by CLS, formerly known as Continuous Linked Settlement), an industry utility that provides a
multi-lateral framework to settle transactions on a payment-versus-payment basis, thus reducing foreign-exchange-
related settlement risk relative to the volume of business. However, mitigation of settlement risk through CLS and other
means does not fully eliminate credit risk in foreign exchange transactions resulting from changes in exchange rates prior
to settlement, which is managed as part of UBS AG’s overall credit risk management of OTC derivatives.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 68
Credit risk models
Basel III – IRB credit risk models
Audited |
UBS AG has developed tools and models to estimate future credit losses that may be implicit in our current
portfolio.
Exposures to individual counterparties are measured using three generally accepted parameters: PD, EAD and LGD. For a
given credit facility, the product of these three parameters results in the expected loss (the EL). These parameters are the
basis for the majority of our internal measures of credit risk, and key inputs for regulatory capital calculation under the
internal ratings-based (IRB) approach of the Basel III framework. Models are also used to derive the portfolio credit risk
measures of EL, statistical loss and stress loss.
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors,
for more information
about the regulatory capital calculation under the IRB approach and key credit risk models applied to UBS AG exposures
Audited |
Internal UBS rating scale and mapping of external ratings
Internal UBS rating
1-year PD range, in %
Description
Moody’s Investors
Service mapping
S&P mapping
Fitch mapping
0 and 1
0.00–0.02
Investment grade
Aaa
AAA
AAA
2
0.02–0.05
Aa1 to Aa3
AA+ to AA–
AA+ to AA–
3
0.05–0.12
A1 to A3
A+ to A–
A+ to A–
4
0.12–0.25
Baa1 to Baa2
BBB+ to BBB
BBB+ to BBB
5
0.25–0.50
Baa3
BBB–
BBB–
6
0.50–0.80
Sub-investment grade
Ba1
BB+
BB+
7
0.80–1.30
Ba2
BB
BB
8
1.30–2.10
Ba3
BB–
BB–
9
2.10–3.50
B1
B+
B+
10
3.50–6.00
B2
B
B
11
6.00–10.00
B3
B–
B–
12
10.00–17.00
Caa1 to Caa2
CCC+ to CCC
CCC+ to CCC
13
>17
Caa3 to C
CCC– to C
CCC– to C
Counterparty is in default
Default
Defaulted
D
D
Probability of default
PD estimates the likelihood of a counterparty defaulting on its contractual obligations over the next 12 months and is
assessed using rating tools tailored to the various categories of counterparties.
The ratings of major credit rating agencies, and their mapping to the UBS masterscale and internal PD bands, are shown
in the “Internal UBS rating scale and mapping of external ratings” table above. For Moody’s and S&P, the mapping is
based on the long-term average of one-year default rates available from these rating agencies, with Fitch ratings being
mapped to the equivalent S&P ratings. For each external rating category, the average default rate is compared with our
internal PD bands to derive a periodically reviewed mapping to our internal rating scale.
Exposure at default
EAD is the amount expected to be owed by a counterparty at the time of possible default. EAD is derived from current
exposure to the counterparty and possible future exposure development.
The EAD of an on-balance sheet loan is its notional amount, while for off-balance sheet commitments that are not drawn,
credit conversion factors (CCFs) are used in order to obtain an expected on-balance sheet amount.
For traded products under the internal model method for derivatives and the repo value-at-risk approach for SFTs, EAD is
derived by modeling the range of possible exposure outcomes at various points in time using a simulation based on a
scenario-consistent technique. UBS AG assesses the net amount that may be owed to it or that it may owe to others, taking
into account the effect of market movements over the potential time it would take to close out positions.
UBS AG assess its exposures where there is a material correlation between the factors driving the credit quality of the
counterparty and those driving the potential future value of UBS AG’s traded products exposure (wrong-way risk), and it
has established specific controls to mitigate such risks.
Loss given default
LGD is the magnitude of the likely loss if there is a default. UBS AG’s LGD estimates, which consider downturn conditions,
include loss of principal, interest and other amounts less recovered amounts. UBS AG determines LGD based on the likely
recovery rate of claims against defaulted counterparties, which depends on the type of counterparty and any credit
mitigation due to collateral or guarantees. UBS AG’s estimates are supported by internal loss data and external
information, where available. If collateral is held, such as marketable securities or a mortgage on a property, LTV ratios
are typically a key parameter in determining LGD.
Expected loss
UBS AG uses the concept of EL to quantify future credit losses that may be implicit in its current portfolio. The EL for a
given credit facility is the product of the three components described above, i.e. PD, EAD and LGD. The EL is aggregated
for individual counterparties to derive expected portfolio credit losses.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 69
IFRS 9 – ECL credit risk models
Expected credit loss
ECL is defined as the difference between contractual cash flows and those UBS AG expects to receive, discounted at the
effective interest rate (EIR) or contractual interest rate. For loan commitments and other credit facilities in scope of ECL
requirements, expected cash shortfalls are determined by considering expected future drawdowns. Rather than focusing
on an average through -the-cycle (TTC) expected annual loss, the purpose of ECL is to estimate the amount of losses
inherent in a portfolio based on current conditions and future outlook (a point-in-time (PIT) measure), whereby such a
forecast has to be unbiased (i.e. exclude conservative adjustments) and include all information available without undue
cost and effort, and address multiple scenarios where there is perceived non-linearity between changes in economic
conditions and their effect on credit losses. From a credit risk modeling perspective, ECL parameters are generally
derivations of the factors assessed for regulatory Basel III EL.
Comparison of Basel III EL and IFRS 9 ECL credit risk models
The IFRS 9 ECL concept has a number of key differences from UBS AG’s Basel III credit risk models, both in the loss
estimation process and the result thereof. Most notably, regulatory Basel III EL parameters are TTC / downturn estimates,
which include a margin of conservatism, while IFRS 9 ECL parameters are typically PIT, reflecting current economic
conditions and future outlook. The table below summarizes the main differences. Stage 1 and 2 ECL expenses in 2025
were USD 8m and the respective allowances and provisions as of 31 December 2025 were USD 1,237m. This included
ECL allowances and provisions of USD 1,125m related to positions under the Basel III IRB approach. Basel III EL for non-
defaulted positions was USD 2,028m.
›
Refer to “Note 1 Summary of material accounting policies” in the “Consolidated financial statements” section of this report for
more information about our accounting policy for allowances and provisions for ECL including key definitions relevant for the ECL
calculation under IFRS 9
The table below shows the main differences between the two expected loss measures.
Basel III EL (IRB approach)
IFRS 9 ECL
Scope
The Basel III IRB approach applies to most credit risk exposures. It
includes transactions measured at amortized cost, at fair value
through profit or loss and at fair value through OCI, including
loan commitments and financial guarantees.
The IFRS 9 ECL calculation mainly applies to financial assets
measured at amortized cost and debt instruments measured at
fair value through OCI, as well as loan commitments and financial
guarantees not at fair value through profit or loss.
12-month versus
lifetime
expected loss
The Basel III IRB approach takes into account expected losses
resulting from expected default events occurring within the next
12 months.
In the absence of a significant increase in credit risk (an SICR), a
maximum 12-month ECL is recognized. Once an SICR event has
occurred, a lifetime ECL is recognized considering expected
default events over the life of the transaction.
Exposure at
default
(EAD)
EAD is the amount we expect a counterparty to owe us at the
time of a possible default. For on-balance sheet banking products,
EAD equals the book value as of the reporting date; for traded
products, the vast majority of EAD is modeled. For lending, EAD is
expected to remain constant over a 12-month period. For loan
commitments, a credit conversion factor (a CCF) is applied to
model expected future drawdowns. The CCF accounts for
downturn effect, includes a margin of conservatism and is aligned
with regulatory floors.
EAD is generally calculated on the basis of the cash flows that are
expected to be outstanding at the individual points in time during
the life of the transaction. For loan commitments, a CCF is applied
to model expected future drawdowns. The CCF’s target is the
best estimate of expected undrawn line usage at default without
any conservative adjustments.
Probability of
default
(PD)
PD estimates are determined on a through-the-cycle (TTC) basis
including conservative adjustments and floors in line with
regulation. They represent historical average PDs, taking into
account observed losses over a prolonged historical period, and
therefore are less sensitive to movements in the underlying
economy.
PD estimates are determined on a point-in-time (PIT) basis, based
on current conditions and incorporating forecasts for future
economic conditions at the reporting date.
Loss given
default
(LGD)
LGD includes prudential adjustments, such as downturn LGD
assumptions and floors. Similar to PD, LGD is determined on a
TTC basis.
LGD should reflect the losses that are reasonably expected to be
incurred and prudential adjustments should therefore not be
applied. Similar to PD, LGD is determined on the basis of a PIT
approach.
Use of scenarios
No use of scenarios.
Multiple forward-looking scenarios have to be taken into account
to determine a probability-weighted ECL.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 70
Further key aspects of credit risk models
Stress loss
UBS AG complements its statistical modeling approach with scenario-based stress loss measures. Stress tests are run
regularly to monitor potential effects of extreme, but nevertheless plausible, events on its portfolios, under which key
credit risk parameters are assumed to deteriorate substantially. Where considered appropriate, limits on this basis are
applied.
Stress scenarios and methodologies are tailored to the portfolios’ natures, ranging from regionally focused to global
systemic events and varying in time horizon.
›
Refer to “Stress testing” in this section for more information about the stress -testing framework
Credit risk model confirmation
UBS AG’s approach to model confirmation involves both quantitative methods, such as monitoring compositional
changes in portfolios and results of backtesting, and qualitative assessments, such as feedback from users on model
output as a practical indicator of a model’s performance and reliability. In addition, changes in market, regulatory and
business practices are assessed.
Material changes in portfolio composition may invalidate the conceptual soundness of a model. UBS AG therefore
performs regular analyses of the evolution of portfolios to identify such changes in the structure and credit quality of
portfolios.
›
Refer to “Model risk” in this section for more information
Backtesting
We monitor the performance of models by backtesting and benchmarking them, with model outcomes compared with
actual results, based on our internal experience and externally observed results. To assess the predictive power of credit
exposure models for traded products, such as OTC derivatives and ETD products, we statistically compare predicted future
exposure distributions at different forecast horizons with realized values.
For PD, we derive a predicted distribution of the number of defaults. The observed number of defaults is compared with
the upper tail of the predicted distribution. If the observed number of defaults is higher than a given upper tail quantile,
we conclude there is evidence that the model may underpredict the number of defaults. Based on historical long-run
average default rates and, if required, additional margin of conservatism, we also derive PD calibration targets and a
lower boundary. As a general rule, follow-up actions, such as a recalibration of the rating tool, are defined if the portfolio
average PD lies below the derived lower boundary.
For LGD, backtesting statistically tests the mean difference between the observed and predicted LGDs. We compare
predicted LGDs with actual outcomes and if any statistically significant deviation is identified, follow-up actions, such as
a recalibration of the models, are taken.
CCFs, used for the calculation of EAD for undrawn facilities, are dependent on several credit facility contractual
dimensions. We compare the predicted amount drawn with observed historical use of such facilities by defaulted
counterparties. If any statistically significant deviation is observed, follow-up actions, such as an update of the relevant
CCFs, are performed.
Changes to models and model parameters during the period
As part of our continuous efforts to enhance models to reflect market developments and newly available data, we
updated several models in 2025.
In Personal & Corporate Banking and Global Wealth Management, we refined the models for the integrated Swiss
income-producing and residential real estate mortgage portfolios.
In Global Wealth Management, a new dedicated PD and LGD model for concentrated equity-based lending was
implemented, and a conservative RWA buffer for concentrated equity-based lending was released accordingly. Moreover,
the derivative exposure modeling within the PD and LGD calculation for standard Lombard loans was further enhanced.
Also, following a review of regulatory requirements and wording of client contracts, the Swiss Financial Market
Supervisory Authority (FINMA) agreed to descope the undrawn amount of uncommitted Lombard loans from the EAD
calculation. This change was implemented for the US portfolio in 2025, with implementation for other portfolios planned
for 2026.
In Global Wealth Management, we have also deployed a new version of the ship finance PD and LGD model, replacing
the previous version implemented on the legacy Credit Suisse infrastructure. Additionally, the US private equity
subscription loans were moved from the standardized approach for credit risk to the foundation IRB approach.
In the Investment Bank, we recalibrated the PD model for corporate clients. We also updated the LGD model for sight
deposits at selected central banks.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 71
Most of the legacy Credit Suisse models have already been decommissioned, with any remaining exposure moved to the
standardized approach for the calculation of risk-weighted assets. The few models still in use on legacy Credit Suisse
infrastructure have been integrated into the UBS model risk management framework and are scheduled to be retired
during the first half of 2026. For positions that have migrated from the legacy Credit Suisse to UBS infrastructure, UBS
models have been adopted accordingly.
Where required, changes to models and model parameters were approved by FINMA before implementation.
›
Refer to “Risk-weighted assets” in the “Capital management” section of this report for more information about the effect of the
changes to models and model parameters on credit risk RWA
Credit-risk-model-related regulatory capital developments
In Switzerland, the amendments to the Capital Adequacy Ordinance that incorporate the final Basel III standards into
Swiss law entered into force on 1 January 2025. The adoption led to a number of revisions to the internal ratings-based
(IRB) approaches, namely removing the option of using the A-IRB approach for certain asset classes, introducing certain
floors for the IRB risk parameters, and various requirements to reduce RWA variability. In addition, the removal of the
internal model approach for credit valuation adjustment became effective.
›
Refer to “Capital management objectives” in the “Capital management” section of this report for more information about the
development of RWA
›
Refer to the “Regulatory and legal developments” section of this report for more information
Credit policies for distressed assets
Non-performing
Audited |
In line with the regulatory definition, we report a claim as non-performing when: (i) it is more than 90 days past
due; (ii) it is subject to restructuring proceedings, where preferential conditions concerning interest rates, subordination,
tenor, etc. have been granted in order to avoid default of the counterparty (forbearance); (iii) the counterparty is subject
to bankruptcy / enforced liquidation proceedings in any form, even if there is sufficient collateral to cover the due
payment; or (iv) there is other evidence that payment obligations will not be fully met without recourse to collateral.
Default and credit impaired
UBS AG uses a single definition of default for classifying assets and determining the PD of its obligors for risk modeling
purposes. The definition of default is based on quantitative and qualitative criteria. A counterparty is classified as
defaulted when material payments of interest, principal or fees are overdue for more than 90 days, or more than 180 days
for certain exposures in relation to loans to private and commercial clients in Personal & Corporate Banking and to private
clients of Global Wealth Management Region Switzerland. UBS AG does not consider the general 90-day presumption
for default recognition appropriate for those portfolios, given the cure rates, which show that strict application of the
90-day criterion would not accurately reflect the inherent credit risk. Counterparties are also classified as defaulted when:
bankruptcy, insolvency proceedings or enforced liquidation have commenced; obligations have been restructured on
preferential terms (forbearance); or there is other evidence that payment obligations will not be fully met without recourse
to collateral. The latter may be the case even if, to date, all contractual payments have been made when due. If one claim
against a counterparty is defaulted on, generally all claims against the counterparty are treated as defaulted.
An instrument is classified as credit impaired if the counterparty is classified as defaulted and / or the instrument is identified
as purchased credit impaired (PCI). An instrument is PCI if it has been purchased at a deep discount to its carrying amount
following a risk event of the issuer or originated with a defaulted counterparty. Once a financial asset is classified as
defaulted / credit impaired (except PCI), it is reported as a stage 3 instrument and remains as such unless all past due
amounts have been rectified, additional payments have been made on time, the position is not classified as credit
restructured, and there is general evidence of credit recovery. A three-month probation period is applied before a transfer
back to stages 1 or 2 can be triggered. However, most instruments remain in stage 3 for a longer period of time.
Forbearance (credit restructuring)
Audited |
If payment default is imminent or default has already occurred, UBS AG may grant concessions to borrowers in financial
difficulties that it would otherwise not consider in the normal course of business, such as offering preferential interest rates,
extending maturity, modifying the schedule of repayments, debt / equity swap, subordination, etc. When a forbearance
measure takes place, each case is considered individually, and the exposure is generally classified as defaulted. Forbearance
classification remains until the loan is repaid or written off, non-preferential conditions are granted that supersede the
preferential conditions or the counterparty has recovered, and the preferential conditions no longer exceed UBS AG’s risk
tolerance.
Contractual adjustments when there is no evidence of imminent payment default, or where changes to terms and
conditions are within UBS AG’s usual risk tolerance, are not considered to be forborne.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 72
Loss history statistics
An instrument is classified as credit impaired if the counterparty has defaulted. This also includes credit-impaired
exposures for which no loss has occurred or for which no allowance has been recognized (e.g. where UBS AG expects to
fully recover the exposures via collateral held).
Coverage ratios are calculated for the core loan portfolio by taking ECL allowances and provisions divided by the gross
carrying amount of the exposures. Core loan exposure is defined as the sum of Loans and advances to customers and
Loans to financial advisors.
The total combined on- and off-balance sheet coverage ratio was 39 basis points as of 31 December 2025, 2 basis points
higher than the ratio as of 31 December 2024. The combined stage 1 and 2 ratio was 10 basis points, unchanged
compared with the ratio as of 31 December 2024; the stage 3 ratio was 34%, 3 percentage points higher than the ratio
as of 31 December 2024.
›
Refer to “Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement” and
“Note 19 Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more
information about ECL measurement and the calculation of the coverage ratio
›
Refer to “Note 13 Other assets” in the “Consolidated financial statements” section of this report for more details
›
Refer to the “UBS AG consolidated performance” section of this report for more information about credit loss expense / release
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 73
Loss history statistics
USD m, except where indicated
31.12.25
31.12.24
31.12.23
Banking products, core exposure and off-balance sheet, gross
1
936,334
879,853
562,095
of which: amounts due from banks and loans and advances to customers, gross
681,253
608,330
434,780
Credit-impaired exposure, gross (stage 3)
7,831
7,492
2,966
of which: credit-impaired amounts due from banks and loans and advances to customers (stage 3)
7,172
7,120
2,586
Non-performing amounts due from banks and loans and advances to customers
6,579
6,044
2,793
ECL allowances and provisions for credit losses
2
3,982
3,527
1,244
of which: core loan exposure (all stages)
3,628
3,203
1,172
of which: amounts due from banks and loans and advances to customers (all stages)
3,250
2,872
942
of which: amounts due from banks and loans and advances to customers (stage 3)
2,613
2,266
377
Write-offs (stage 3)
442
380
77
of which: write-offs for amounts due from banks and loans and advances to customers
429
361
62
Credit loss expense / (release)
3
549
544
143
Ratios
Credit-impaired lending assets as a percentage of total lending assets, gross (%)
4
1.1
1.2
0.6
Non-performing lending assets as a percentage of total lending assets, gross (%)
4
1.0
1.0
0.6
ECL allowances for lending assets as a percentage of total lending assets, gross (%)
4
0.5
0.5
0.2
Write-offs as a percentage of average gross lending assets outstanding during the period (%)
4
0.1
0.1
0.0
1 Includes amounts due from banks, core loan exposure (Loans and advances to customers and Loans to financial advisors) and off balance sheet items defined as guarantees and loan commitments. 2 Includes
provisions for ECL of guarantees and loan commitments and allowances for securities financing transactions. 3 Includes credit loss expense / (release) for other financial assets at amortized cost, guarantees, loan
commitments, and securities financing transactions. 4 Lending assets include amounts due from banks and loans and advances to customers.
Market risk
Audited |
Main sources of market risk
Market risks arise from both trading and non-trading business activities.
–
Trading market risks arise primarily in the Investment Bank, Non-core and Legacy and, to a lesser extent, Global Wealth
Management. In the Investment Bank these risks are mainly connected with securities and derivatives trading for
market-making and client facilitation, as well as Global Banking activity for primary debt and equity underwriting. In
Non-core and Legacy, market risk is limited and results from a largely hedged portfolio of both complex and simple
credit, interest rate and equity derivative transactions. A limited contribution to market risk in Global Wealth
Management comes from municipal securities and taxable fixed-income securities.
–
Non-trading market risks arise predominantly in the form of interest rate and foreign exchange risks connected with
personal banking and lending in our wealth management businesses, the Swiss business of our Personal & Corporate
Banking business division, the Investment Bank’s lending business, and treasury activities.
–
Group Treasury assumes market risks in the process of managing interest rate risk, structural foreign exchange risk and
the Group’s liquidity and funding profile, including high-quality liquid assets (HQLA).
–
Equity and debt investments can also give rise to market risks, as can some aspects of employee benefits, such as
defined benefit pension schemes.
Audited |
Overview of measurement, monitoring and management techniques
–
Market risk limits are set for the Group, the business divisions and Group Treasury at granular levels in the various
business lines, reflecting the nature and magnitude of the market risks.
–
Management value-at-risk (VaR) measures exposures under the market risk framework, including trading market risks
and some non-trading market risks. Non-trading market risks not included in VaR are covered in the risks controlled
by the Market and Treasury Risk Control functions.
–
Our primary portfolio measures of market risk are liquidity-adjusted stress loss and VaR. Both are subject to limits that
are approved by the Board of Directors (the BoD). Market risk measurement for certain legacy Credit Suisse components
can differ from UBS AG excluding the aforementioned legacy Credit Suisse components, as set out below. These
positions continue to be managed on legacy Credit Suisse infrastructure until full migration of these positions to UBS
infrastructure or the liquidation of the positions.
–
These measures are complemented by concentration and granular limits for general and specific market risk factors.
Our trading businesses are subject to multiple market risk limits, which take into account the extent of market liquidity
and volatility, business outlook and growth, and, for our single-name exposures, issuer credit quality.
–
Trading market risks are managed at portfolio level. As risk factor sensitivities change due to new transactions,
transaction expiries or changes in market levels, risk factors are dynamically rehedged to remain within limits. We do
not generally seek to distinguish in the trading portfolio between specific positions and associated hedges.
–
Issuer risk for credit products is controlled by limits applied at the business-division level based on jump-to-zero
measures, which estimate maximum default exposure (the default event loss assuming zero recovery).
–
Non-trading foreign exchange risks are managed under market risk limits, with the exception of Group Treasury
management of consolidated capital activity.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 74
Our CRO Treasury function applies a holistic risk framework, setting the appetite for treasury-related risk-taking activities
across UBS AG. Key elements of the framework include an overarching regulatory (interest rate risk in the banking book
(IRRBB)) delta economic value of equity (EVE) target, set by the BoD. Limits are also set by the BoD to balance the effect
of foreign exchange movements on our common equity tier 1 (CET1) capital and CET1 capital ratio. Non-trading interest
rate and foreign exchange risks are included in firm-wide statistical and stress-testing metrics, which flow into our risk
appetite framework.
Equity and debt investments are subject to a range of risk controls, including preapproval of new investments for
commercial purposes by business management and Risk Control and regular monitoring and reporting by Group Finance.
They are also included in firm-wide statistical and stress-testing metrics.
›
Refer to the “Currency management” section of this report for more information about Group Treasury’s management of foreign
exchange risks
›
Refer to the “Capital management” section of this report for more information about the sensitivity of our CET1 capital and CET1
capital ratio to currency movements
Market risk stress loss
The measurement and management of market risks include an extensive set of stress tests and scenario analyses,
continuously evaluated to ensure that losses resulting from an extreme yet plausible event do not exceed our risk appetite.
Liquidity-adjusted stress
Liquidity-adjusted stress is our primary stress loss measure for firm-wide market risk. The framework captures the
economic losses that could arise under specified stress scenarios. Shocks are applied to positions based on expected
market movements in the liquidity-adjusted holding periods resulting from the specified scenario.
Holding periods are used for liquidity-adjusted stress to reflect the time needed to reduce or hedge the risk of positions
in each major risk factor in a stressed environment. We apply minimum holding periods, regardless of observed liquidity
levels, as identification of and reaction to a crisis may not always be immediate.
The expected market movements are derived using historical market behavior (based on analysis of historical events) and
forward-looking analysis including consideration of defined scenarios that have not occurred in the past.
Stress-based limits apply at several levels of the organizational hierarchy. Liquidity-adjusted stress is also the core market
risk component of our combined stress test framework and therefore integral to our overall risk appetite framework.
›
Refer to “Risk appetite framework” in this section for more information
›
Refer to “Stress testing” in this section for more information about our stress -testing framework
Value-at-risk
VaR definition
Audited |
VaR is a statistical measure of market risk, quantifying the potential market risk losses over a set time horizon
(holding period) at an established level of confidence. VaR assumes no change in UBS AG’s trading positions over the set
time horizon.
We calculate VaR daily. The profit or loss distribution from which VaR is estimated is derived from our internally developed
VaR model, which simulates returns over the holding period for risk factors our trading positions are sensitive to, and
subsequently quantifies the profit / loss effect of these risk factor returns on our trading positions. Systematic commodity,
credit, equity, foreign exchange rate and interest rate risk factor returns are based on a pure historical simulation
approach. An unweighted five-year look-back window is used for UBS AG excluding certain legacy Credit Suisse
components and an exponentially weighted two-year window for the aforementioned legacy Credit Suisse components.
Modeling idiosyncratic and specific risks for equity and credit risk factors using historical simulation is challenging, due
to the limited availability of continuous good-quality historical data. Wherever possible, historical simulation to model-
specific risk is used for the legacy Credit Suisse components; however, both traded market risk portfolios rely upon factor
models to distinguish systematic and idiosyncratic returns. For UBS AG excluding certain legacy Credit Suisse components,
idiosyncratic returns are simulated through a Monte Carlo model, aggregating the sum of systematic and residual returns
in such a way that systematic and residual risk are consistently captured. For the legacy Credit Suisse components, the
available distribution of idiosyncratic returns is used to determine an extreme scenario for a given risk factor’s specific
risk; the resultant VaR and extreme scenario loss for a given risk factor are aggregated using a zero-correlation
assumption.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 75
VaR models are used for internal management purposes, with exposures measured using VaR at a
% confidence level
for UBS AG excluding certain legacy Credit Suisse components, and a
% confidence level for the aforementioned
legacy Credit Suisse components, and applying a 1-day holding period, aligned to the way we consider the risks
associated with our trading activities. From 2026, VaR limits are established for UBS AG excluding certain legacy Credit
Suisse components only; VaR limits for legacy Credit Suisse components have been decommissioned, as the remaining
exposure is immaterial.
Management VaR for the period
Average management VaR (1-day, 95% confidence level) of UBS AG excluding certain legacy Credit Suisse components
in 2025 decreased to USD 10m from USD 12m in 2024, mainly driven by the Investment Bank’s Global Markets business.
Average management VaR (1-day, 98% confidence level) of the aforementioned legacy Credit Suisse components in
2025 decreased to USD 3m from USD 12m in 2024, driven by continued strategic migration of positions to UBS AG and
exposure reduction in Non-core and Legacy.
Audited |
Management value-at-risk (1-day, 95% confidence level, 5 years of historical data) of the business divisions and Group
Items excluding certain legacy Credit Suisse components, by general market risk type
1,2
For the year ended 31.12.25
USD m
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Min.
Max.
Average
31.12.25
Total management VaR
Average (per business division and risk type)
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
3,4
(6 )
(7 )
(1 )
(4 )
(4 )
(1 )
For the year ended 31.12.24
USD m
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Min.
Max.
Average
31.12.24
Total management VaR
Average (per business division and risk type)
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
3,4
(6 )
(8 )
(1 )
(5 )
(4 )
(1 )
1 The legacy Credit Suisse components not included in the UBS AG management VaR reflect the portfolio managed on legacy Credit Suisse infrastructure based on legacy Credit Suisse management VaR methodology
until full migration of these positions to UBS infrastructure or the liquidation of the positions. This process is ongoing, and the management VaR of the legacy Credit Suisse components is expected to continue
decreasing over time. 2 Statistics at individual levels may not be summed to deduce the corresponding aggregate figures. The minima and maxima for each level may occur on different days, and, likewise, the VaR
for each business line or risk type, being driven by the extreme loss tail of the corresponding distribution of simulated profits and losses for that business line or risk type, may well be driven by different days in the
historical time series, rendering invalid the simple summation of figures to arrive at the aggregate total. 3 The difference between the sum of the standalone VaR for the business divisions and Group Items and the
total VaR. 4 As the minima and maxima for different business divisions and Group Items occur on different days, it is not meaningful to calculate a portfolio diversification effect.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 76
Management value-at-risk (1-day, 98% confidence level, 2 years of historical data) of certain legacy Credit Suisse
components of the business divisions and Group Items, by general market risk type
1,2
For the year ended 31.12.25
USD m
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Min.
Max.
Average
31.12.25
Total management VaR
Average (per business division and risk type)
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
3,4
(1 )
(1 )
For the year ended 31.12.24
USD m
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Min.
Max.
Average
31.12.24
Total management VaR
Average (per business division and risk type)
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
3,4
(3 )
(1 )
(2 )
(2 )
1 The legacy Credit Suisse components not included in the UBS AG management VaR reflect the portfolio managed on legacy Credit Suisse infrastructure based on legacy Credit Suisse management VaR methodology
until full migration of these positions to UBS infrastructure or the liquidation of the positions. This process is ongoing, and the management VaR of the legacy Credit Suisse components is expected to continue
decreasing over time. 2 Statistics at individual levels may not be summed to deduce the corresponding aggregate figures. The minima and maxima for each level may occur on different days, and, likewise, the VaR
for each business line or risk type, being driven by the extreme loss tail of the corresponding distribution of simulated profits and losses for that business line or risk type, may well be driven by different days in the
historical time series, rendering invalid the simple summation of figures to arrive at the aggregate total. 3 The difference between the sum of the standalone VaR for the business divisions and Group Items and the
total VaR. 4 As the minima and maxima for different business divisions and Group Items occur on different days, it is not meaningful to calculate a portfolio diversification effect.
VaR limitations
Audited |
Actual realized market risk losses may differ from those implied by VaR for a variety of reasons.
–
VaR is calibrated to a specified level of confidence and may not indicate potential losses beyond this confidence level.
–
The 1-day time horizon used for VaR for internal management purposes may not fully capture market risk of positions
that cannot be closed out or hedged within the specified period.
–
In some cases, VaR calculations approximate the effect of changes in risk factors on the values of positions and
portfolios.
–
Effects of extreme market movements are subject to estimation errors, which may result from non-linear risk
sensitivities, and the potential for actual volatility and correlation levels to differ from assumptions implicit in VaR
calculations.
–
The choice of a longer historical window means sudden increases in market volatility will tend not to increase VaR as
quickly as the use of shorter historical observation periods, but such increases will affect VaR for a longer period of
time. Similarly, after periods of increased volatility, as markets stabilize, VaR predictions will remain more conservative
for a period of time, influenced by the length of the historical observation period.
We recognize that no single measure can encompass all risks associated with a position or portfolio. We use a set of
metrics with both overlapping and complementary characteristics to create a holistic framework that aims to ensure
material completeness of risk identification and measurement. As a statistical aggregate risk measure, VaR supplements
our comprehensive stress-testing framework.
We also have a framework to identify and quantify potential risks not fully captured by our VaR model and refer to such
risks as risks not in VaR.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 77
VaR model confirmation
VaR backtesting is a performance measurement process in which a 1-day VaR prediction is compared with the realized
1-day profit or loss. We conduct backtesting for internal model confirmation purposes.
VaR model developments in 2025
Audited |
In 2025, no material changes were made to the VaR model used for UBS AG excluding certain legacy Credit Suisse
components or to the VaR model used for those certain legacy Credit Suisse components.
Market-risk-related regulatory capital developments
The Basel Committee on Banking Supervision (the BCBS) final Basel III standards on the minimum capital requirements
for market risk, known as the Fundamental Review of the Trading Book (the FRTB), entered into force on 1 January 2025.
FINMA issued implementing ordinances to support these changes. These ordinances are effective from 1 January 2025
and provide technical details for the revised Capital Adequacy Ordinance, ensuring alignment with international
standards. Key elements of the revised market risk framework include: (i) changes to the internal model-based approach,
including changes to the model approval and performance measurement process; (ii) changes to the standardized
approach with the aim of providing a credible fallback method for an internal model-based approach; and (iii) a revised
boundary between the trading book and the banking book.
As part of going live with the FRTB, UBS has adopted the standardized approach for all FINMA-regulated legal entities,
including UBS AG.
›
Refer to “Risk-weighted assets” in the “Capital management” section of this report for more information about the development
of RWA including the regulatory add-on
›
Refer to the “Regulatory and legal developments” section of this report for more information
Interest rate risk in the banking book
Sources of interest rate risk in the banking book
Audited |
IRRBB arises from balance sheet positions such as Amounts due from banks, Loans and advances to customers,
Financial assets at fair value not held for trading, Financial assets measured at amortized cost, Customer deposits, Debt
issued measured at amortized cost, and Derivative financial instruments, including those subject to hedge accounting.
Fair value changes to these positions may affect other comprehensive income (OCI) or the income statement, depending
on their accounting treatment.
UBS AG’s largest banking book interest rate exposures arise from customer deposits and lending products in Global
Wealth Management and Personal & Corporate Banking, as well as from debt issuance, liquidity buffers and interest rate
hedges in Group Treasury. The inherent interest rate risks stemming from Global Wealth Management and Personal &
Corporate Banking are generally transferred to Group Treasury, to manage them centrally together with UBS AG’s
modeled interest rate duration assigned to equity, goodwill and real estate. This makes the netting of interest rate risks
across different sources possible, while leaving the originating businesses with commercial margin and volume
management. The residual interest rate risk is mainly hedged with interest rate swaps, to the vast majority of which
UBS AG applies hedge accounting. Short-term exposures and HQLA classified as Financial assets at fair value not held for
trading are hedged with derivatives accounted for on a mark-to-market basis. Long-term fixed-rate debt issued and HQLA
hedged with external interest rate swaps are designated in fair value hedge accounting relationships.
Risk management and governance
IRRBB is measured using several metrics, the most relevant of which are the following.
–
EVE sensitivity to yield curve moves is calculated as changes in the present value of future cash flows irrespective of
accounting treatment. These yield curve moves are also the key risk factors for statistical and stress-based measures,
e.g. VaR and stress scenarios, as well as the regulatory interest rate scenarios. These are measured and reported daily.
The regulatory IRRBB EVE exposure is the most adverse regulatory interest rate scenario that is netted across currencies.
It excludes the sensitivity from additional tier 1 (AT1) capital instruments (as per specific FINMA requirements) and the
modeled interest rate duration assigned to equity, goodwill and real estate. UBS AG also applies granular internal
interest rate shock scenarios to its banking book positions to monitor its specific risk profile.
–
Net interest income (NII) sensitivities to yield curve moves are calculated as changes of baseline NII over a set time
horizon, which we internally compute by assuming interest rates in all currencies develop according to their market-
implied forward rates and assuming constant business volumes and product mix and no specific management actions.
The sensitivities are measured and reported monthly.
UBS AG actively manages IRRBB, with the aim of reducing the volatility of NII subject to limits and triggers for EVE and
NII exposure at consolidated and significant legal entity levels.
The Asset and Liability Committee (the ALCO) of UBS AG and, where relevant, ALCOs at a legal entity level perform
independent oversight over the management of IRRBB, which is also subject to Internal Audit and model governance.
›
Refer to “Internal Audit” in the “Corporate governance” section of this report and to “Risk measurement” in this section for more
information
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 78
Key modeling assumptions
The cash flows from customer deposits and lending products used in calculation of EVE sensitivity exclude commercial
margins and other spread components, are aggregated by daily time buckets and are discounted using risk-free rates.
UBS AG’s external issuances are discounted using its senior debt curve, and capital instruments are modeled to the first
call date. NII sensitivity, which includes commercial margins, is calculated over a one-year time horizon, assuming constant
balance sheet structure and volumes, and considers embedded interest rate options.
The average repricing maturity of non-maturing deposits and loans is determined via target replication portfolios designed
to protect product margins. Optimal replicating portfolios are determined at granular currency- and product-specific levels
by simulating and applying a real-world market rate model to historically calibrated client rate and volume models.
UBS AG uses an econometric prepayment model to forecast prepayment rates on US mortgage loans in UBS Bank USA
and agency mortgage-backed securities (MBSs) held in various liquidity portfolios of UBS Americas Holding LLC
consolidated. These prepayment rates are used to forecast both mortgage loan and MBS balances under various
macroeconomic scenarios. The prepayment model is used for a variety of purposes, including risk management and
regulatory stress testing. Swiss mortgages and fixed-term deposits generally do not carry similar optionality, due to
prepayment and early redemption penalties.
Effect of interest rate changes on shareholders’ equity and CET1 capital
The “Accounting and capital effect of changes in interest rates” table below shows the effects on shareholders’ equity
and CET1 capital of gains and losses from changes in interest rates in the main banking book positions. We use derivatives
to hedge interest rate risks in the banking book and these reflect changes in interest rates as an immediate fair value
gain or loss, recognized either in the income statement or through OCI. Where hedged items are accrual accounted, we
aim to minimize accounting asymmetries by applying hedge accounting to reflect the economic hedge relationship.
In a rising rate scenario, we would have an initial decrease in shareholders’ equity as a result of fair value losses on our
derivatives recognized in OCI, while we would expect higher NII over time as rates increase. The effect on CET1 capital
would be much lower, as gains and losses on interest rate swaps designated as cash flow hedges are not recognized for
regulatory capital purposes.
Accounting and capital effect of changes in interest rates
1
Recognition
Shareholders’ equity
CET1 capital
Timing
Income statement / OCI
Gains
Losses
Gains
Losses
Loans and deposits at amortized cost
2,3
Gradual
Income statement
l
l
l
l
Other financial assets and liabilities measured at amortized cost
2
Gradual
Income statement
l
l
l
l
Debt issued measured at amortized cost
2,3
Gradual
Income statement
l
l
l
l
Receivables and payables from securities financing transactions
2
Gradual
Income statement
l
l
l
l
Financial assets at fair value not held for trading
Immediate
Income statement
l
l
l
l
Financial assets at fair value through other comprehensive income
Immediate
OCI
l
l
l
Derivatives designated as cash flow hedges
Immediate
OCI
4
l
l
Derivatives designated as fair value hedges
5
Immediate
Income statement
l
l
l
l
Derivatives transacted as economic hedges
Immediate
Income statement
l
l
l
l
1 Refer to the “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” table in the “Capital management” section of this report for more information about the differences
between shareholders’ equity and CET1 capital. 2 For fixed-rate financial instruments, changes in interest rates affect the income statement when these instruments roll over and reprice. 3 For hedge-accounted
items, a fair value adjustment is applied in line with the treatment of the hedging derivatives. 4 Excluding hedge ineffectiveness that is recognized in the income statement in accordance with IFRS Accounting
Standards. 5 The fair value of the derivatives is offset by the fair value adjustment of the hedged items. Under the fair value hedge program applied to cross-currency swaps and foreign currency debt, the foreign
currency basis spread is excluded from the hedge designation and accounted for through OCI, which is included in CET1.
Economic value of equity sensitivity
Audited |
The EVE sensitivity in UBS AG’s banking book to a +1-basis-point parallel shift in yield curves was negative
USD
m as of 31 December 2025, compared with negative USD
m as of 31 December 2024. This excluded the
sensitivity of USD
m from AT1 capital instruments (as per specific FINMA requirements) in contrast to general BCBS
guidance. The exposure in the banking book of UBS AG increased in 2025, driven by net interest income stabilization
initiatives and interest rate hedges in connection with issuances of AT1 capital instruments.
The majority of UBS AG’s IRRBB as of 31 December 2025 was a reflection of the net asset duration that it ran to offset
our modeled sensitivity of net USD
m (31 December 2024: USD
m) assigned to our equity, goodwill and real
estate, with the aim of generating a stable NII contribution. Of this, USD
m and USD
m were attributable to the
US dollar and the Swiss franc portfolios, respectively, (31 December 2024: USD
m and USD
m, respectively).
In addition to the aforementioned sensitivity, UBS AG calculates the six interest rate shock scenarios prescribed by FINMA.
The “Parallel up” scenario, assuming all positions were measured at fair value, was the most severe as of 31 December
2025 and would have resulted in a change in EVE of negative USD
bn, or
% of UBS AG’s tier 1 capital
(31 December 2024: negative USD
bn, or
%), which is well below the
% threshold as per the BCBS supervisory
outlier test for high levels of IRRBB.
The immediate effect on UBS AG’s tier 1 capital in the “Parallel up” scenario as of 31 December 2025 would have been
a decrease of approximately USD
bn, or
%, in its tier 1 capital (31 December 2024: USD
bn, or
%), reflecting
the fact that the vast majority of UBS AG’s banking book is accrual accounted or subject to hedge accounting. The
“Parallel up” scenario would subsequently have a positive effect on NII, assuming a constant balance sheet.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 79
As the overall interest rate risk sensitivity shows a greater impact from slower asset repricing compared with faster
liabilities repricing, the “Parallel down” scenario was the most beneficial as of 31 December 2025 and would have
resulted in a change in EVE of positive USD
bn (31 December 2024: positive USD
bn) and a small positive
immediate effect on UBS AG‘s tier 1 capital.
Net interest income sensitivity
The main NII sensitivity in the banking book resides in Global Wealth Management and Personal & Corporate Banking.
UBS AG assigns a target duration to its investment of equity portfolio, and Group Treasury actively manages the residual
IRRBB. This sensitivity is assessed using a number of scenarios assuming parallel and non-parallel shifts in yield curves,
with various degrees of severity, and UBS AG has set and monitors thresholds for the NII sensitivity to immediate parallel
shocks of –200 and +200 basis points under the assumption of no change to balance sheet size and product mix, stable
foreign exchange rates, and no specific management action.
›
Refer to the “UBS AG consolidated performance” section of this report for more information about sensitivity to interest rate
movements
Audited |
Interest rate risk – banking book
31.12.25
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 capital
instruments
Total
+1 bp
(12.5 )
(1.6 )
(0.2 )
(28.4 )
(1.0 )
(43.8 )
(35.7 )
Parallel up
2
(1,771.8 )
(305.2 )
(50.6 )
(5,680.8 )
(239.7 )
(8,048.1 )
(6,542.8 )
Parallel down
2
(1,765.8 )
Steepener
3
(888.9 )
(16.0 )
(9.0 )
(1,369.1 )
(2,275.8 )
(1,940.1 )
Flattener
4
(34.2 )
(59.4 )
Short-term up
5
(171.4 )
(125.9 )
(15.8 )
(2,217.0 )
(146.2 )
(2,676.3 )
(2,023.2 )
Short-term down
6
(680.4 )
31.12.24
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 capital
instruments
Total
+1 bp
(10.5 )
(1.3 )
(0.3 )
(24.6 )
(0.5 )
(37.1 )
(31.6 )
Parallel up
2
(1,510.7 )
(251.8 )
(64.4 )
(4,747.8 )
(96.2 )
(6,670.9 )
(5,661.1 )
Parallel down
2
(1,183.4 )
Steepener
3
(748.7 )
(4.0 )
(10.6 )
(1,253.2 )
(9.2 )
(2,025.8 )
(1,858.2 )
Flattener
4
(37.8 )
(2.2 )
(11.0 )
Short-term up
5
(150.2 )
(112.6 )
(24.0 )
(1,815.4 )
(46.8 )
(2,148.9 )
(1,658.3 )
Short-term down
6
(510.8 )
1 Economic value of equity. 2 Rates across all tenors move by ±150 bps for Swiss franc, ±200 bps for euro and US dollar, and ±250 bps for pound sterling. 3 Short-term rates decrease and long-term rates
increase. 4 Short-term rates increase and long-term rates decrease. 5 Short-term rates increase more than long-term rates. 6 Short-term rates decrease more than long-term rates.
Other market risk exposures
Own credit
UBS AG is exposed to changes in its own credit reflected in the valuation of financial liabilities designated at fair value
when UBS AG’s own credit risk would be considered by market participants, except for fully collateralized liabilities or
other obligations for which it is established market practice to not include an own-credit component.
›
Refer to “Note 20 Fair value measurement” in the “Consolidated financial statements” section of this report for more information
about own credit
Structural foreign exchange risk
Upon consolidation, assets and liabilities held in foreign operations are translated into US dollars at the closing foreign
exchange rate on the balance sheet date. Value changes (in US dollars) of non-US-dollar assets or liabilities due to foreign
exchange movements are recognized in OCI and therefore affect shareholders’ equity and CET1 capital.
Group Treasury uses strategies to manage this foreign currency exposure, including matched funding of assets and
liabilities and net investment hedging.
›
Refer to “Sensitivity to currency movements” in the “Capital management” section and to the “Currency management” section of
this report for more information about our exposure to and management of structural foreign exchange risk
›
Refer to “Note 24 Hedge accounting” in the “Consolidated financial statements” section of this report for more information about
our hedges of net investments in foreign operations
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 80
Investment risk
UBS AG is exposed to investment risk by holding own investments in equity securities, investment fund units and debt
instruments.
Equity investments and investment fund units
Audited |
UBS AG makes direct investments in a variety of entities and buys equity holdings in both listed and unlisted
companies, with the aim of supporting its business activities and delivering strategic value to the firm. This includes
investments in exchange and clearing house memberships, as well as minority investments in early-stage fintechs and
technology companies. UBS AG may also make investments in funds that it manages in order to fund or seed them at
inception or to demonstrate that UBS AG’s interests align with those of investors. UBS AG also buys, and is sometimes
required by agreement or regulation to buy, securities and units from investment vehicles that it has sold to clients.
The fair value of equity investments tends to be influenced by factors specific to the individual investments. Equity
investments are generally intended to be held for the medium or long term and may be subject to lock-up agreements.
For these reasons, UBS AG generally does not control these exposures by using market risk measures applied to trading
activities. However, such equity investments are subject to a different range of controls, including preapproval of new
investments for commercial purposes by business management and Risk Control, portfolio and concentration limits, and
regular monitoring and reporting to senior management. They are also included in the firm-wide statistical and stress-
testing metrics, which flow into the risk appetite framework.
As of 31 December 2025, UBS AG held equity investments and investment fund units totaling USD
bn (31 December
2024: USD
bn), of which USD
bn (31 December 2024: USD
bn) was classified as Financial assets at fair value
not held for trading and USD
bn (31 December 2024: USD
bn) as Investments in associates.
›
Refer to “Note 20 Fair value measurement” and “Note 27 Interests in subsidiaries and other entities” in the “Consolidated
financial statements” section of this report for more information
›
Refer to “Note 1 Summary of material accounting policies” in the “Consolidated financial statements” section of this report for
more information about the classification of financial instruments
Debt investments
Audited |
Debt investments classified as Financial assets measured at fair value through other comprehensive income as of
31 December 2025 can broadly be categorized as money market instruments and debt securities primarily held for
statutory, regulatory or liquidity reasons.
The risk control framework applied to debt instruments classified as Financial assets measured at fair value through other
comprehensive income depends on the nature of the instruments and the purpose for which we hold them. UBS AG’s
exposures may be included in market risk limits or be subject to specific monitoring and interest rate sensitivity analysis. They
are also included in the firm-wide statistical and stress-testing metrics, which flow into our risk appetite framework.
Debt instruments classified as Financial assets measured at fair value through other comprehensive income had a fair
value of USD
bn as of 31 December 2025 (31 December 2024: USD
bn). The increase mainly reflects purchases
of HQLA.
›
Refer to “Note 20 Fair value measurement” in the “Consolidated financial statements” section of this report for more information
›
Refer to “Economic value of equity sensitivity” in this section for more information
›
Refer to “Note 1 Summary of material accounting policies” in the “Consolidated financial statements” section of this report for
more information about the classification of financial instruments
Pension risk
We provide a number of pension plans for past and current employees, some classified as defined benefit pension plans
under IFRS Accounting Standards, which can have an effect on our equity under IFRS Accounting Standards and CET1
capital.
Pension risk is the risk that defined benefit plans’ funded status might decrease, negatively affecting our capital. This can
result from decreases in the value of a plan’s assets, increases in defined benefit obligations or combinations of the above.
Important risk factors affecting the fair value of pension plans’ assets include equity market returns, interest rates, bond
yields, and real estate prices. Important risk factors affecting the present value of expected future benefit payments
include high-grade bond yields, interest rates, inflation rates, and life expectancy.
Pension risk is included in our firm-wide statistical and stress-testing metrics, which flow into our risk appetite framework.
The potential effects are thus captured in the post-stress capital ratio calculations.
›
Refer to “Note 1 Summary of material accounting policies” and “Note 25 Post-employment benefit plans” in the “Consolidated
financial statements” section of this report for more information about defined benefit plans
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 81
Country risk
Country risk framework
Country risk includes all country-specific events occurring in a sovereign jurisdiction that may lead to impairment of
UBS AG’s exposures. It may take the form of: (i) sovereign risk, which is the ability and willingness of a government to
honor its financial commitments; (ii) transfer risk, which arises if a counterparty or issuer cannot acquire foreign currencies
following a moratorium by a central bank on foreign exchange transfers; or (iii) “other” country risk. “Other” country
risk may manifest itself through increased and multiple counterparty and issuer default risk (systemic risk) or through
events that may affect a country’s standing, such as adverse shocks affecting political stability or institutional and / or
legal frameworks.
UBS AG assigns a country rating to each country, which reflects its view of a country’s creditworthiness and of the
probability of a country risk event occurring. Country ratings are mapped to statistically derived default probabilities,
described under “Probability of default” in this section. UBS AG uses this internal analysis to set the credit ratings of
governments and central banks, estimate the probability of a transfer event occurring, and establish rules on how aspects
of country risk should be incorporated in counterparty ratings of non-sovereign entities domiciled in the respective
country.
Country ratings are also used to define UBS AG’s risk appetite regarding foreign countries. A country risk limit (i.e.
maximum aggregate exposure) applies to exposures to counterparties or issuers of securities and financial investments in
the given foreign country. UBS AG may limit the extension of credit, transactions in traded products or positions in
securities based on a country risk ceiling even if its exposure to a counterparty is otherwise acceptable. Country limits are
approved by the Board of Directors and are delegated to the President of the Executive Board and the CRO according to
the country rating and limit size.
UBS AG’s country risk framework differs across the firm, and alignment of approaches is part of the ongoing integration
of Credit Suisse.
For internal measurement and control of country risk, UBS AG also considers the financial effect of market disruptions
arising prior to, during and after a country crisis. These may take the form of a severe deterioration in a country’s debt,
equity or other asset markets, or a sharp depreciation of its currency. UBS AG uses stress testing to assess potential
financial effects of severe country or sovereign crises. This involves the developing of plausible stress scenarios for
combined stress testing and the identification of countries that may potentially be subject to a crisis event, determining
potential losses and making assumptions about recovery rates depending on the types of credit transactions involved and
their economic importance to the affected countries.
Country risk exposure
Country risk exposure measure
The presentation of country risk follows UBS AG’s internal risk view, where the basis for measuring exposures depends
on the product category in which the exposures are classified. In addition to the classification of exposures into banking
products and traded products, covered in “Credit risk profile of UBS AG” in this section, for UBS AG excluding certain
legacy Credit Suisse components the trading inventory is also shown.
Banking products exposure represents notional amounts. Traded products potential exposure reflects the possible impact
of market movements on both the exposure and any related collateral over the period required to close out UBS AG’s
positions. UBS AG does not recognize any expected recovery values when reporting country exposure; the risk-reducing
effects of master netting agreements and collateral held is recognized, which is deducted from the potential exposure
values. Within banking products and traded products, risk-reducing effects of credit protection are also taken into
account.
Trading inventory includes issuer risk on securities (such as bonds and equities) and risk relating to underlying reference
assets for derivative positions. Trading inventory is managed on a net basis, and the value of long positions is netted
against that of short positions with the same underlying issuer. Net exposures are floored at zero per issuer. As a result,
potentially offsetting benefits of certain hedges and short positions across issuers are not recognized.
Country risk exposure allocation
In general, exposures are shown against the country of domicile of the contractual counterparty or the issuer of the
security. For some counterparties whose economic substance in terms of assets or source of revenues is primarily
located in a different country, the exposure is allocated to the risk domicile of those assets or revenues.
In the case of derivatives, UBS AG shows the counterparty’s risk potential exposure against the counterparty’s country
of risk (presented within traded products). In addition, risk associated with an instantaneous fall in value of underlying
reference assets to zero (assuming no recovery) is shown against the country of risk of the issuer of the reference asset
(presented within the trading inventory for UBS AG excluding certain legacy Credit Suisse components only). This
approach enables UBS AG to capture both counterparty and, where applicable, issuer elements of risk arising from
derivatives and applies comprehensively for all derivatives, including single-name credit default swaps and other credit
derivatives.
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Risk, capital, liquidity and funding, and balance sheet | Risk management and control 82
Top 20 country risk exposures
The table below shows UBS AG’s 20 largest country exposures by product type, excluding its home country, as of
31 December 2025 compared with 31 December 2024.
Compared with 2024, UBS AG’s net exposure was largely stable. The list of UBS AG’s top 20 countries remained broadly
unchanged, with two new entries (Brazil and Austria) and the exposure to each of those two not exceeding USD 2.0bn.
Based on the sovereign rating categories, as of 31 December 2025, 84% of UBS AG’s emerging market country exposure
was rated investment grade, compared with 85% as of 31 December 2024.
Venezuela
As of 31 December 2025, our direct country risk exposure to Venezuela was USD 4m, solely from issuer risk exposure in
the Investment Bank.
Israel and Middle East
As of 31 December 2025, UBS AG’s direct country risk exposure to Israel was USD 375m, mainly from lending and
collateralized over-the-counter derivatives exposure within the Investment Bank. UBS AG’s direct exposure to Gulf
Cooperation Council countries as of 31 December 2025 was USD 4.1bn, while its direct exposure to Egypt, Jordan and
Lebanon was limited, and it had no direct exposure to Iran, Iraq or Syria.
Russia
UBS AG’s direct country risk exposure to Russia contributed USD 382m to its total emerging market exposure of
USD 26.6bn as of 31 December 2025. This included cash account balances and lending exposures from Non-core and
Legacy. UBS AG had no material direct country risk exposure to Belarus or to Ukraine as of 31 December 2025. Potential
second-order impacts, such as European energy security, continue to be monitored.
Top 20 country risk net exposures, by product type
USD m
Banking products
1,2
Traded products
3
Trading inventory
4,5
Total
2
31.12.25
31.12.24
31.12.25
31.12.24
31.12.25
31.12.24
31.12.25
31.12.24
United States
142,740
156,763
26,306
28,847
62,232
42,744
231,279
228,353
United Kingdom
15,383
15,644
13,981
18,112
4,294
1,880
33,658
35,637
Germany
15,054
15,247
5,891
7,162
9,067
7,796
30,012
30,205
Japan
23,439
20,131
5,147
4,757
953
931
29,539
25,819
France
2,027
2,007
3,820
4,936
8,118
7,786
13,965
14,729
Singapore
3,988
3,568
2,235
3,565
6,842
5,127
13,065
12,260
Australia
6,763
6,357
4,054
8,404
2,112
2,158
12,928
16,920
Canada
1,750
835
3,134
2,839
5,825
4,843
10,708
8,516
Luxembourg
5,730
6,360
528
1,191
107
99
6,365
7,649
China
2,060
1,661
876
1,278
2,247
1,971
5,183
4,910
Netherlands
1,447
1,830
1,732
2,572
1,868
1,044
5,047
5,446
Hong Kong
1,329
1,490
1,690
1,190
1,065
1,111
4,084
3,792
South Korea
1,232
602
679
666
2,026
3,100
3,938
4,368
Italy
1,719
1,542
897
909
1,074
904
3,689
3,355
Sweden
332
413
898
1,479
1,435
1,442
2,665
3,334
Norway
144
70
426
440
2,048
1,299
2,617
1,809
Spain
1,178
937
533
661
681
502
2,392
2,099
Brazil
439
576
644
410
804
391
1,887
1,377
Austria
271
261
468
535
1,110
654
1,850
1,450
Finland
81
76
188
303
1,341
1,335
1,610
1,713
Total top 20
6
227,106
236,370
74,127
90,256
115,249
87,117
416,481
413,741
1 Includes loans, guarantees and loan commitments. 2 Net of hedges and before deduction of IFRS 9 ECL allowances and provisions. 3 Includes counterparty risk from derivatives and securities financing transactions
measured using potential exposure, after master netting agreements, net of collateral and net of hedges. 4 Represents an issuer’s net long position, including securities and tradable obligations, such as derivatives,
which are referenced to that issuer. 5 Trading inventory exposures are for UBS AG excluding legacy Credit Suisse components only. 6 Excluding Switzerland, supranationals, global funds and ship finance exposures.
Emerging markets net exposure, by internal UBS country rating category
1,2
USD m
31.12.25
31.12.24
Investment grade
22,292
23,025
Sub-investment grade
4,325
4,155
Total
26,617
27,180
1 UBS AG classifies countries as emerging markets based on per capita GDP, historical real GDP growth, alignment with international institutions (such as the BIS, the World Bank, the IMF and the MSCI) and other
factors. 2 Net of credit hedges (for banking products and for traded products); net long per issuer (for trading inventory) for UBS AG excluding legacy Credit Suisse components only. Before deduction of IFRS 9 ECL
allowances and provisions.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 83
Non-financial risk
Non-financial risk includes our main risk categories: compliance risk, financial crime risk, operational risk, legal risk and
reputational risk. Compliance risk, financial crime risk and operational risk are independently overseen by Group
Compliance and Operational Risk Control (GCORC) and are covered in this section. Legal and reputational risks can
materialize across these three risk clusters, with legal risks overseen by Group Legal and reputational risk by control
functions.
›
Refer to “Risk categories” in this section for more information about our main non-financial risk categories
›
Refer to “Top and emerging risks” in this section for more information about legal and reputational risk
Compliance risk
We are committed to achieving fair outcomes for our clients, upholding market integrity and cultivating the highest
standards of employee conduct. To support these objectives, we maintain a Group-wide conduct risk framework designed
to promote consistent standards and foster a strong culture of accountability.
We continue to prioritize areas such as suitability risk, market conduct, product governance, cross-divisional service
offerings, quality of advice and price transparency. These remain key focus areas for the Group, UBS AG and the wider
financial sector. Cross-border risk (including the risk of unintended permanent establishment) remains an area of
regulatory attention for global financial institutions, including a focus on market access, such as third-country market
access to the European Economic Area. We maintain a series of controls designed to address these risks.
Regulatory fragmentation related to environmental, social and governance topics, and the elevated risk of greenwashing
arising from our service offering, disclosures and commitments remain key risks for 2026.
›
Refer to “Top and emerging risks” in this section for more information
Financial crime risk
Financial crime, including money laundering, terrorist financing, sanctions violations, fraud, bribery and corruption,
presents a major risk, as technological innovation and geopolitical developments increase the complexity of doing
business and heightened regulatory attention continues.
An effective financial crime prevention program therefore remains essential, and we continue to focus on enhancements to
our global anti-money-laundering, know-your-client and sanctions programs. Money laundering and financial fraud
techniques are becoming increasingly sophisticated, and heightened geopolitical volatility makes the sanctions landscape
more complex. We continue to take into consideration the risks of illicit finance proceeds and sanctions circumvention
typologies stemming from geopolitical developments, political changes in a number of countries and evolving armed
conflicts.
›
Refer to “Top and emerging risks” in this section for more information
Operational risk
There is an increased risk of cyber-related operational disruption to business activities at our locations and those of third-
party suppliers due to the increasingly dynamic threat environment. This is intensified by current geopolitical factors and
evidenced by the continuing high volumes and increasing sophistication of cyberattacks against financial institutions
globally and on third-party service providers. A notable example of this is a previously disclosed data breach at Chain IQ,
one of our third-party suppliers. Our incident review has not identified any impact on UBS AG’s clients or systems, but
the data breach included the exposure of certain non-sensitive UBS AG employee and vendor information.
We remain on heightened alert to respond to and mitigate elevated cyber- and information-security threats and continue
to invest in improving our technology infrastructure and information-security governance to strengthen our prevention,
detection and response capabilities against attacks. In addition, we operate a global framework designed to drive
enhancements in operational resilience across all business divisions, and we work with the third-party service providers
that are of critical importance to our operations to assess their operational resilience in line with our standards and to
mitigate any identified risks.
UBS AG manages cyber and other risks associated with the use of third parties (including outsourcing) through policies
such as the Third Party Risk Management (TPRM) Policy and the Global Procurement and Vendor Management Policy.
These aim at managing third-party risk by appropriate risk controls and independent arrangements. UBS AG also transfers
risk centrally, by means of insurance contracts, analyzing and securing insurance coverage that meets its global needs
and complies with local requirements.
The increasing interest in data-driven advisory processes and the use of forms of artificial intelligence (AI), such as
generative AI and machine learning, are introducing new questions related to the fairness of AI algorithms, data life-cycle
management, data ethics, data privacy and security, and records management. We have established an AI framework
and policy including risk appetite metrics and enhanced controls to support the mitigation of these risks.
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Risk, capital, liquidity and funding, and balance sheet | Risk management and control 84
Further progress has been made with client and data migration, and the wind-down of legacy Credit Suisse businesses
and infrastructure. The risks relating to the operational complexity and the effective management of businesses in wind-
down and application decommissioning continue to be carefully monitored, in addition to the delivery of consolidated
financial and regulatory reporting submissions.
›
Refer to “Top and emerging risks” in this section for more information
Non-financial risk framework
We follow a firm-wide non-financial risk framework that establishes requirements for identifying, controlling, managing,
assessing and mitigating compliance risk, financial crime risk and operational risk to maintain the safety and soundness
of the firm and to protect its financial position and reputation. The framework is built on the following pillars:
–
classifying inherent risks through 19 non-financial risk taxonomies, which define the universe of non-financial risks
that can arise as a consequence of our business activities and external factors;
–
performing control assurance activities, including self-assessing the design and operating effectiveness of controls,
first- and second-line-of-defense control reviews, and independent control testing;
–
defining the non-financial risk appetite (including relevant indicators for each non-financial risk taxonomy) and
assessing risk exposure against appetite;
–
assessing inherent and residual risk through risk assessment processes and determining whether additional remediation
plans are required to address identified deficiencies; and
–
reporting transparently and objectively on non-financial risks.
Divisional Presidents are accountable for the effectiveness of non-financial risk management and for the robustness of
the front-to-back control environment within their business divisions, and legal-entity-responsible executives are in charge
of non-financial risk management within their legal entities. Group function heads are accountable for supporting the
divisional Presidents and legal-entity-responsible executives of our legal entities in the discharge of this responsibility, by
ensuring completeness and effectiveness of the control environment and non-financial risk management within their
Group functions. Collectively, divisional Presidents, central Group function heads and legal-entity-responsible executives
are in charge of implementing the non-financial risk framework.
GCORC owns the firm’s non-financial risk framework and is responsible for providing an independent and objective view
of the adequacy of non-financial risk management across the firm and ensuring that compliance risk, financial crime risk
and operational risk are understood, owned and managed in accordance with our risk appetite. Business- or function-
aligned Compliance and Operational Risk Control teams are embedded within the GCORC function, reporting to the
Chief Compliance and Operational Risk Control Officer, a member of the Executive Board (the EB).
All functions within UBS AG are required to periodically assess the design and operating effectiveness of key internal non-
financial risk controls. Key control deficiencies identified during the internal control and risk assessment processes must
be reported in the non-financial risk inventory, and sustainable remediation must be defined and executed. These control
deficiencies are assigned to owners at senior management level and the remediation progress is reflected in the respective
managers’ annual performance measurement and objectives. To assist with prioritizing the most material control
deficiencies and measuring aggregated risk exposure, irrespective of origin, a common rating methodology is applied
across all three lines of defense, as well as by external audit.
UBS AG is committed to transparent reporting of non-financial risks, providing clear and reliable information to support
decision-making by executive management and the board of directors. Key reports cover the firm and risk-taking business
divisions and significant group entities, with strong data governance standards ensuring high-quality, timely, and
comprehensive reporting.
The non-financial risk framework forms the common basis for managing and assessing compliance risk, financial crime
risk and operational risk, and there are additional GCORC activities intended to demonstrate compliance with applicable
laws, rules and regulations. Furthermore, non-financial risk mitigation is supported by a comprehensive set of policies
and procedures (including risk culture, risk appetite and outsourcing) that are governed under our global governance
document framework.
›
Refer to “Risk appetite framework” in this section for more information about risk appetite and risk culture
›
Refer to “Operational risk” in this section for more information about outsourcing
Reputational risk management
Our reputation is ultimately defined by our ability to adhere to the three keys: our
Pillars, Principles and Behaviors
. In
accordance with our Code of Conduct and Ethics, it is the responsibility of the Board of Directors (the BoD) and each
employee to refrain from any conduct which may pose a risk to our reputation.
›
Refer to “Employees” in the “Our stakeholders” section of the UBS Group Annual Report 2025, available under “Annual reporting”
at
ubs.com/investors
, for more information about our Pillars, Principles and Behaviors
›
Refer to the Code of Conduct and Ethics of UBS, available at
ubs.com/code
, for more information
All employees are responsible for carefully evaluating the risk to UBS’s own reputation that may result from any business
activities. Reputational risk is considered as part of standard risk identification and assessment processes governed by
relevant frameworks relating to new and existing clients, transactions, products and services. The business divisions and
Group functions have primary responsibility for identifying, assessing and managing reputational risk.
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Cybersecurity and information security
Risk management and strategy
Cybersecurity and information-security (CIS) risk is the risk that a malicious internal or external act, a failure of technology,
or human error materially compromises the confidentiality, integrity or availability of UBS AG’s data, systems or services.
CIS risk is a key operational risk for UBS AG and is managed within our enterprise risk management framework. We apply
a layered defense model, spanning prevention, detection, response and recovery, supported by our global Cybersecurity
Operations Centers, advanced technology and independent oversight. Our approach integrates governance, risk
assessment, controls testing, incident management and continuous training of our workforce (i.e. our internal employees
and external staff) to strengthen our ability to manage the assets of clients and of the firm.
›
Refer to “Risk governance” in this section for information about our risk governance framework
In line with our overall non-financial risk management framework, we take a cross-functional approach to addressing
CIS risk. Our risk control framework follows the three-lines-of-defense model. Group Technology establishes the policies
and procedures designed to safeguard our information systems and the information those systems collect and process.
The business divisions, together with Group Technology, are then responsible for implementing those policies and
procedures as part of the first line of defense. GCORC leads the second line of defense, by convening and consulting
with additional control functions to provide independent oversight, and challenges the first line’s CIS framework and
implementation. As the third line of defense, Internal Audit conducts independent reviews and validates the first-line and
second-line processes and functions.
accountability for the Group-wide CIS program. The CIS-C is jointly chaired by the Chief Operating Officer (the COO) and
the Chief Compliance and Operational Risk Control Officer. The Group Chief Information Security Officer (the Group
CISO), who reports to both the COO and the Chief Compliance and Operational Risk Control Officer, is a permanent
member of the CIS-C. The committee meets monthly and serves as a platform for interaction across the three lines of
defense for the identification and effective governance of CIS strategy, risks and regulatory obligations.
CIS program
Our CIS program is led by the Group CISO. The CIS program is designed to protect and maintain the integrity and
availability of our technology infrastructure and the confidentiality and integrity of our information. It is aligned to an
industry standard framework established by the Cyber Risk Institute across seven functional domains: govern, identify,
protect, detect, respond, recover and extend. This framework provides a comprehensive model for financial institutions
to assess, manage and mature their cyber-risk posture, connecting controls to compliance and operational needs.
Our Group CISO, senior management within Group Technology and management personnel overseeing the CIS program
all have substantial relevant expertise in the areas of cybersecurity and information security. Our CIS program includes,
but is not limited to, the following capabilities.
–
Threat intelligence:
cyber-threat intelligence team analyzes such information and uses it to enhance existing defense capabilities, to
respond to identified threats and to adjust our CIS strategy where needed. The team’s remit includes providing
research, analysis and advice on CIS risks associated with emerging technologies, including AI. This threat intelligence
capability was strengthened in 2025 with the formation of a cross-function Geopolitical Risk Intelligence Forum and
the introduction of an AI-led horizon scanning capability.
–
Preventative and detection controls:
cyberattacks. Defenses include system hardening, firewalls, intrusion prevention and detection systems, and other
controls. External network connections are identified and recorded in an inventory. Access rights are defined for
information assets, and IT systems and applications enforce authentication. We maintain access controls and approval
processes designed to prevent unauthorized access.
–
Cyber-defense and incident response capabilities:
24/7 real-time monitoring, detection and response capabilities for cyberattacks and acting as the primary interface for
cybersecurity events. Incidents assessed as having the potential to adversely affect our critical operations are subject
to mandatory management notification. If assessed as potentially significant, cybersecurity and data incidents are
managed under our crisis management framework.
–
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 86
–
Monitoring and testing:
vulnerability assessments, penetration and testing engagements based on specific threat scenarios that simulate tactics,
techniques and procedures that might be used against our systems, as mandated by our policies. This includes testing
by internal and external red teams (simulating attacks by potential adversaries). Actual security-related events are
directly correlated with threat scenarios to monitor and detect potential threats, such as network-intrusion and
malware-driven events. Our deployed security measures are designed with the objective of isolating and containing
threats that are detected to allow for effective incident response and analysis.
–
Education and training:
All UBS staff, including our external personnel, receive appropriate CIS awareness training,
commensurate with their roles and responsibilities.
CIS assessment framework
Our CIS assessment framework includes internal and external cybersecurity risk assessments for applications and bank
processes alongside a structured risk assessment process of third-party service providers. These processes are designed,
along with our security capabilities, to support business objectives and priorities.
We conduct assessments to evaluate and test our CIS program and provide guidance on operating and improving the
program, including the design and operational effectiveness of the security and resiliency of our information systems.
Our assessments, along with our threat intelligence capabilities, are used to assess and prioritize programs to improve
our security, our incident response capabilities and our operational resilience. As the cyber-threat landscape evolves at an
increasing pace, we continuously seek to enhance our CIS controls to meet developing threats. We have ongoing
programs that are intended to increase our CIS maturity across various dimensions, including governance, identification,
protection and detection, as well as cyberattack response and recovery, and risk from third-party service providers.
We recognize that in today’s world it is not feasible to completely eliminate the risk of a future cyberattack, but, by using
a risk-based approach, we work toward reducing the likelihood of a successful attack and toward mitigation of the
potential business impact of such an attack.
The BoD, its Risk Committee and the EB receive regular updates and reports throughout the year from our COO and our
Group CISO on internal and external CIS developments, threats and risks. In addition, on a quarterly basis, the BoD
receives reports on the performance of CIS risk appetite metrics, including metrics on vulnerabilities and third-party CIS
risks and incidents, and is notified promptly if a BoD-level CIS risk limit is breached. The Risk Committee of the BoD and
the EB also receive regular updates on CIS strategy, risks and alignment with regulatory requirements.
›
Refer to “Crisis management framework” in the “Regulation and supervision” section of this report for more information about
our crisis management framework
Non-financial risk capital measurement
The non-financial risk framework underpins the calculation of regulatory capital for operational risk, which enables us to
quantify non-financial risks and define effective risk-mitigating management incentives as part of the related operational
risk capital allocation approach to the business divisions.
The advanced measurement approach (AMA), previously utilized to determine regulatory capital requirements for non-
financial risks, was replaced by the standardized approach for determining regulatory capital on 1 January 2025, based
on the final Basel Committee on Banking Supervision (BCBS) Basel III standards and related FINMA guidance. In line with
the implemented standards, we continue to update annually the related regulatory capital. Revenue data and information
on non-financial risk events are sourced from our financial accounting and risk systems.
›
Refer to “Capital management objectives” in the “Capital management” section of this report for more information about the
capital impacts from the adoption of the final Basel III standards on 1 January 2025
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Risk, capital, liquidity and funding, and balance sheet | Risk management and control 87
Model risk
Main sources of model risk
We rely on models to inform risk management and control decisions, to measure risks or exposures, to value instruments
or positions, to conduct stress testing, to assess adequacy of capital, and to manage clients’ assets and our own assets.
Models may also be used to measure and monitor compliance with rules and regulations, for surveillance activities, and
to meet financial or regulatory reporting requirements. Our artificial intelligence (AI)-based solutions may rely on models,
and models may include functionalities defined as AI.
Model risk is defined as the risk of adverse consequences (e.g. financial losses or reputational damage) resulting from
incorrect or misused models. AI-specific risks are managed in conjunction with other relevant risk frameworks, and specific
guidelines for the recognition of those risks apply.
Overview of measurement, monitoring and management techniques
Our model governance framework establishes requirements for identifying, measuring, monitoring, reporting, controlling
and mitigating model risk. All the models that we use are subject to governance and controls throughout their life cycles,
with rigor, depth and frequency determined by the model’s materiality and complexity. This is designed to ensure that
risks arising from model use are identified, understood, managed, monitored, controlled and reported on both a model-
specific and an aggregated level. Before approval for use is granted, models are independently validated.
Once approved for use, a model is subject to ongoing model monitoring, regular model confirmation and periodic
revalidation, ensuring that the model is only used if it continues to be fit for purpose.
Our model risk governance framework follows our overarching risk governance framework along the three lines of
defense, with: (i) the business divisions and Group functions (including Risk Control, Finance and Compliance) responsible
for the development, maintenance and appropriate use of the models; (ii) the Model Risk Management and Control
function, headed by the Chief Model Risk Officer, responsible for independent review, oversight and challenge of the
models; and (iii) Internal Audit, responsible for the assessment of the design and operating effectiveness and sustainability
of the related processes.
Model risk is included in the firm-wide risk appetite framework.
Model oversight committees and forums ensure that model risk is overseen at different levels of the organization,
appropriate model risk management and control actions are taken and, where necessary, escalated to the next level. The
Group Model Governance Committee is our most senior oversight and escalation body for all models in scope of our
model governance framework. It is co-chaired by the Group Chief Risk Officer and the Group CFO and is responsible for:
(i) reviewing and approving changes to the framework; (ii) approving the model risk appetite statement; (iii) overseeing
adherence to the UBS model risk governance framework; and (iv) monitoring model risk at a firm-wide level.
The legacy Credit Suisse models were either retired or integrated into the UBS model risk management framework in
2025.
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Risk, capital, liquidity and funding, and balance sheet | Capital management 88
Capital management
Capital management objectives
Audited |
An adequate level of common equity tier 1 (CET1) capital and total loss-absorbing capacity (TLAC) meeting both
internal assessment and regulatory requirements is a prerequisite for conducting our business activities.
We are therefore committed to maintaining a strong CET1 capital and TLAC position at all times, in line with our target
capital ratios, in order to ensure compliance with regulatory capital requirements and to support the growth of our
businesses.
As of 31 December 2025, the CET1 capital ratio was 14.4% and CET1 leverage ratio 4.3%, each above the requirements
for Swiss systemically relevant banks (SRBs) and Basel Committee on Banking Supervision (BCBS) requirements. We believe
that our capital strength, consistent with our capital guidance, is a source of confidence for our stakeholders, contributes
to our sound credit ratings and is one of the foundations of our success.
In Switzerland, the amendments to the Capital Adequacy Ordinance (the CAO) that incorporate the final Basel III
standards into Swiss law, including the new ordinances containing the implementing provisions for the revised CAO,
entered into force on 1 January 2025.
›
Refer to “We may be unable to maintain our capital strength” in the “Risk factors” section of this report for more information
about capital-ratio-related risks
›
Refer to “Developments related to the implementation of the final Basel III standards” in the “Regulatory and legal
developments” section of this report for more information about the incorporation of final Basel III standards
›
Refer to “Capital and capital ratios of our significant regulated subsidiaries” in this section for more information
›
Refer to “Risk-weighted assets” and “Leverage ratio denominator” in this section for more information about the impacts
resulting from the adoption of the final Basel III standards on risk-weighted assets (RWA) and the leverage ratio denominator
(the LRD), respectively
Swiss SRB total loss-absorbing capacity framework
The disclosures in this section are provided for UBS AG on a consolidated basis and focus on key developments during
the reporting period and information in accordance with the Basel III framework, as applicable to Swiss SRBs.
Additional regulatory disclosures for UBS AG on a consolidated basis are provided in the 31 December 2025 Pillar 3
Report, available under “Pillar 3 disclosures” at
ubs.com/investors
.
Capital and other regulatory information for UBS Group AG consolidated in accordance with the Basel III framework, as
applicable to Swiss SRBs, is provided in the UBS Group Annual Report 2025, available under “Annual reporting” at
ubs.com/investors
.
Regulatory framework
The Basel III framework came into effect in Switzerland on 1 January 2013 and is embedded in the CAO. The CAO also
includes the too-big-to-fail (TBTF) provisions applicable to Swiss SRBs.
Under the Swiss SRB framework, going and gone concern requirements represent UBS AG’s total TLAC requirement.
RWA calculations are based on the applicable rules and models approved by the Swiss Financial Market Supervisory
Authority (FINMA).
Capital and other instruments contributing to total loss-absorbing capacity
CET1 capital mainly consists of share capital, share premium and retained earnings. In addition to CET1 capital, the
following instruments contribute to TLAC:
–
loss-absorbing additional tier 1 (AT1) capital instruments (high trigger), including Deferred Contingent Capital Plan (DCCP)
awards granted at Group level and substantially on lent to UBS AG;
–
45% of unrealized gains from financial assets measured at fair value through other comprehensive income (such gains
can be recognized as tier 2 capital); and
–
TLAC-eligible unsecured debt instruments.
Under the Swiss SRB rules, going concern capital includes CET1 capital and high-trigger loss-absorbing AT1 capital
instruments.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 89
Outstanding TLAC-eligible unsecured debt instruments are eligible to meet gone concern requirements until one year
before maturity. A maximum of 25% of the gone concern requirements can be met with instruments that have a
remaining maturity of between one and two years (i.e. are in the last year of eligibility). However, once at least 75% of
the minimum gone concern requirement has been met with instruments that have a remaining maturity of greater than
two years, all instruments that have a remaining maturity of between one and two years remain eligible to be included
in the total gone concern capital.
›
Refer to “Bondholder information”, available at
ubs.com/investors
, for more information about the eligibility and key features
and terms and conditions of capital instruments
Total loss-absorbing capacity and leverage ratio requirements
Going concern capital requirements
Under the Swiss SRB requirements, total going concern minimum requirements for all Swiss SRBs are a capital ratio
requirement of 12.86% of RWA and a leverage ratio requirement of 4.5%. In addition to these minimum requirements,
an add-on reflecting the degree of systemic importance is applied, based on market share and LRD. The applicable market
share and LRD add-on requirements for UBS AG were both unchanged at 0.72% of RWA and 0.25% of LRD, resulting
in add-ons of 1.44% of RWA and 0.50% of LRD. As a result of the acquisition of the Credit Suisse Group in 2023, the
capital add-ons applicable to UBS SRBs based on market share and LRD will increase commensurate with the Group’s
increased market share and higher LRD after the acquisition.
The phase-in of the increased capital requirements commenced on 1 January 2026 and will be completed by 1 January
2030. Phase-in requirements are composed of the existing add-ons and the phased-in increases, resulting in phase-in
add-ons as of 1 January 2026 for RWA-based requirements of 0.86% for increased market share and 0.79% for higher
LRD and add-ons for LRD-based requirements of 0.30% for increased market share and 0.28% for higher LRD.
The Swiss countercyclical capital buffer, at a maximum level of 2.5% on risk-weighted positions that are directly or
indirectly backed by residential properties in Switzerland, increased the minimum CET1 capital requirement by 39 basis
points as of 31 December 2025. We also continued to apply countercyclical buffer requirements introduced in other BCBS
member jurisdictions, which resulted in an additional buffer requirement of 11 basis points as of 31 December 2025.
Overall, countercyclical capital buffers contributed 50 basis points to the minimum CET1 capital requirement as of
31 December 2025.
The UBS AG going concern requirements include the FINMA Pillar 2 capital add-on of USD 107m related to the supply
chain finance funds matter at Credit Suisse. This Pillar 2 capital add-on results in an additional CET1 capital ratio
requirement of 2 basis points and an additional CET1 leverage ratio requirement of 1 basis point as of 31 December
2025.
Effective 1 January 2025, a Pillar 2 capital add-on has been introduced for residual exposures (after collateral mitigation)
to hedge funds, private equity and family offices. This resulted in an increase of 20 basis points in the RWA-based going
concern capital requirement as of 31 December 2025.
The total going concern capital requirements applicable are 15.02% of RWA (including countercyclical buffer
requirements and the Pillar 2 add-ons) and 5.01% of LRD. Furthermore, of the total going concern capital requirement
of 15.02% of RWA, at least 10.66% must be met with CET1 capital, while a maximum of 4.36% can be met with high-
trigger loss-absorbing AT1 capital instruments.
Similarly, of the total going concern leverage ratio requirement of 5.01%, at least 3.51% must be met with CET1 capital,
while a maximum of 1.50% can be met with high-trigger loss-absorbing AT1 capital instruments.
Gone concern loss-absorbing capacity requirements
As an internationally active Swiss SRB, UBS AG is also subject to gone concern loss-absorbing capacity requirements. The
gone concern requirements also include add-ons for market share and LRD.
Systemically important banks (SIBs), such as UBS AG, are subject to base gone concern capital requirements equivalent
to 75% of the total going concern requirements (excluding countercyclical buffer requirements and the Pillar 2 add-ons).
In addition, FINMA has the authority to impose a surcharge of up to 25% of the total going concern requirements
(excluding countercyclical buffer requirements and the Pillar 2 add-ons) based on obstacles to an SIB’s resolvability
identified in future resolvability assessments. Total gone concern requirements remained substantially unchanged in 2025.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 90
Gone concern requirements can be reduced when higher-quality capital instruments (CET1 capital, low-trigger loss-
absorbing AT1 or certain low-trigger tier 2 capital instruments) are used to meet gone concern requirements. As of
31 December 2025, UBS AG did not use any higher-quality capital instruments to fulfill gone concern requirements.
The gone concern requirement after the potential reduction for the use of higher-quality capital instruments has been
floored at 10.0% and 3.75% for the RWA- and LRD-based requirements, respectively.
In this report, we refer to the RWA-based gone concern requirements as gone concern loss-absorbing capacity
requirements and the RWA-based gone concern ratio is referred to as the gone concern loss-absorbing capacity ratio.
The table below provides the RWA- and LRD-based requirements and information as of 31 December 2025.
Swiss SRB going and gone concern requirements and information
As of 31.12.25
RWA
LRD
USD m, except where indicated
in %
in %
Required going concern capital
Total going concern capital
1
1
Common equity tier 1 capital
2
3
of which: minimum capital
of which: buffer capital
of which: countercyclical buffer
Maximum additional tier 1 capital
2
of which: additional tier 1 capital
of which: additional tier 1 buffer capital
Eligible going concern capital
Total going concern capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
of which: base requirement including add-ons for market share and LRD
7
7
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
8
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible unsecured debt
Total loss-absorbing capacity
Required total loss-absorbing capacity
Eligible total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
1 Includes applicable add-ons of 1.66% for risk-weighted assets (RWA) and 0.51% for leverage ratio denominator (LRD), of which 2 basis points for RWA and 1 basis point for LRD reflect a Pillar 2 capital add-on of
USD 107m related to the supply chain finance funds matter at Credit Suisse. An additional 20 basis points for RWA reflect a Pillar 2 capital add-on for the residual exposure (after collateral mitigation) to hedge funds,
private equity and family offices, effective 1 January 2025. 2 Includes the Pillar 2 add-on for the residual exposure (after collateral mitigation) to hedge funds, private equity and family offices of 0.14% for CET1
capital and 0.06% for AT1 capital, effective 1 January 2025. For AT1 capital under Pillar 1 requirements a maximum of 4.3% of AT1 capital can be used to meet going concern requirements; 4.36% includes the
aforementioned Pillar 2 capital add-on. 3 Our CET1 leverage ratio requirement of 3.51% consists of a 1.5% base requirement, a 1.5% base buffer capital requirement, a 0.25% LRD add-on requirement, a 0.25%
market share add-on requirement based on our Swiss credit business and a 0.01% Pillar 2 capital add-on related to the supply chain finance funds matter at Credit Suisse. 4 A maximum of 25% of the gone concern
requirements can be met with instruments that have a remaining maturity of between one and two years. Once at least 75% of the minimum gone concern requirement has been met with instruments that have a
remaining maturity of greater than two years, all instruments that have a remaining maturity of between one and two years remain eligible to be included in the total gone concern capital. 5 Systemically important
banks (SIBs) are subject to base gone concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical buffer requirements and the Pillar 2 add-ons). 6 FINMA has
the authority to impose a surcharge of up to 25% of the total going concern capital requirements (excluding countercyclical buffer requirements and the Pillar 2 add-ons) should obstacles to an SIB’s resolvability be
identified in future resolvability assessments. 7 Includes applicable add-ons of 1.08% for RWA and 0.38% for LRD. 8 Reflects an add-back of 45% of unrealized gains from financial assets measured at fair value
through other comprehensive income. Such gains do not qualify as CET1 capital but 45% of these gains can be recognized as tier 2 capital.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 91
Total loss-absorbing capacity
Swiss SRB going and gone concern information
USD m, except where indicated
31.12.25
31.12.24
Eligible going concern capital
Total going concern capital
Total tier 1 capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
1
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible unsecured debt
Total loss-absorbing capacity
Total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
of which: common equity tier 1 capital ratio
Gone concern loss-absorbing capacity ratio
Total loss-absorbing capacity ratio
Leverage ratios (%)
Going concern leverage ratio
of which: common equity tier 1 leverage ratio
Gone concern leverage ratio
Total loss-absorbing capacity leverage ratio
1 Reflects an add-back of 45% of unrealized gains from financial assets measured at fair value through other comprehensive income. Such gains do not qualify as CET1 capital but 45% of these gains can be recognized
as tier 2 capital.
Audited |
Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital
USD m
31.12.25
31.12.24
Total equity under IFRS Accounting Standards
Equity attributable to non-controlling interests
(334 )
(662 )
Defined benefit plans, net of tax
(945 )
(822 )
Deferred tax assets recognized for tax loss carry-forwards
(2,434 )
(2,288 )
Deferred tax assets for unused tax credits
(827 )
(688 )
Deferred tax assets on temporary differences, excess over threshold
(673 )
Goodwill, net of tax
1
(6,292 )
(6,207 )
Intangible assets, net of tax
(95 )
(103 )
Expected losses on advanced internal ratings-based portfolio less provisions
(903 )
(569 )
Unrealized (gains) / losses from cash flow hedges, net of tax
Own credit related to (gains) / losses on financial liabilities measured at fair value that existed at the balance sheet date, net of tax
Own credit related to (gains) / losses on derivative financial instruments that existed at the balance sheet date
(65 )
(62 )
Prudential valuation adjustments
(148 )
(167 )
Accruals for dividends to shareholders for 2024
(13,000 )
Accruals for proposed dividends to shareholders for 2025
2
(9,000 )
Threshold 3 deductions
(63 )
Other
(74 )
(69 )
Total common equity tier 1 capital
1 Includes goodwill related to significant investments in financial institutions of USD
m as of 31 December 2025 (31 December 2024: USD
m) presented on the balance sheet line Investments in associates.
2 Reflects a proposed ordinary dividend distribution of USD
bn and the appropriation of USD
bn to a special dividend reserve, both subject to approval at the Annual General Meeting in the second quarter of
2026. The decision on the distribution of the special dividend is intended to be made at an Extraordinary General Meeting in the second half of 2026 and is subject to UBS AG meeting its capital requirements on a
standalone and consolidated level, and the outcome and timing of the implementation of the new regulatory regime in Switzerland.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 92
Total loss-absorbing capacity and movement
TLAC decreased by USD 1.6bn to USD 180.2bn as of 31 December 2025.
Going concern capital and movement
Audited |
CET1 capital mainly consists of: share capital; share premium, which primarily consists of additional paid-in capital
related to shares issued; and retained earnings. A detailed reconciliation of equity under IFRS Accounting Standards to CET1
capital is provided in the “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1
capital” table.
CET1 capital decreased by USD
bn to USD
bn as of 31 December 2025, mainly as operating profit before tax of
USD
bn and foreign currency translation gains of USD
bn were more than offset by dividend accruals of USD
bn
and current tax expenses of USD
bn.
Loss-absorbing AT1 capital issued by the Group and on lent to UBS AG increased by USD
bn to USD
bn, mainly
driven by new issuances of AT1 capital instruments of USD
bn and positive impacts from interest rate risk hedge,
foreign currency translation and other effects. These increases were partly offset by the call of USD
bn equivalent of
AT1 capital instruments.
Following the approval of a maximum amount of conversion capital by UBS Group AG’s shareholders at the 2024 Annual
General Meeting, AT1 capital instruments issued from the beginning of the fourth quarter of 2023 are, upon the
occurrence of a trigger event or a viability event, subject to conversion into UBS Group AG ordinary shares rather than a
write-down. AT1 capital instruments issued prior to the fourth quarter of 2023 remain subject to a write-down. The
corresponding AT1 capital instruments on lent to UBS AG contain the same provisions.
›
Refer to “Conversion capital” in the “Corporate Governance” section of the UBS Group Annual Report 2025, available under
“Annual Reporting” at
ubs.com/investors
, for more information about conversion capital
Gone concern loss-absorbing capacity and movement
Audited |
Total gone concern loss-absorbing capacity decreased by USD
bn to USD
bn as of 31 December 2025 and
largely reflected USD
bn of TLAC-eligible unsecured debt issued by the Group and on lent to UBS AG.
The decrease of USD 2.0bn mainly reflected the redemption of USD 14.0bn equivalent of TLAC-eligible unsecured debt
instruments and USD 5.8bn TLAC-eligible unsecured debt instruments that were repurchased in November 2025 under
tender offers, as well as USD 5.5bn equivalent of TLAC-eligible unsecured debt instruments and USD 0.2bn of tier 2
instruments ceasing to be eligible as gone concern capital as they entered the final year before maturity. The
aforementioned decreases were partly offset by new issuances of TLAC-eligible unsecured debt instruments totaling the
equivalent of USD 17.8bn and positive effects from interest rate risk hedge, foreign currency translation and other effects.
Loss-absorbing capacity and leverage ratios
Our CET1 capital ratio decreased to 14.4% from 14.9%, reflecting a USD 3.4bn decrease in CET1 capital, partly offset
by a USD 5.3bn decrease in RWA.
›
Refer to “Risk-weighted assets” in this section for more information about RWA movements
Our CET1 leverage ratio decreased to 4.3% from 4.8%, due to a USD 99.6bn increase in the LRD and the aforementioned
decrease in CET1 capital.
›
Refer to “Leverage ratio denominator” in this section for more information about LRD movements
Our going concern capital ratio increased to 18.4% from 18.1%, reflecting the aforementioned decrease in RWA and a
USD 0.4bn increase in going concern capital.
Our going concern leverage ratio decreased to 5.5% from 5.9%, reflecting the aforementioned increase in the LRD,
partly offset by the aforementioned increase in going concern capital.
Our gone concern loss-absorbing capacity ratio decreased to 18.4% from 18.6%, reflecting a USD 2.0bn decrease in
gone concern loss-absorbing capacity, partly offset by the aforementioned decrease in RWA.
Our gone concern leverage ratio decreased to 5.6% from 6.1%, driven by the aforementioned increase in the LRD and
the aforementioned decrease in gone concern loss-absorbing capacity.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 93
Swiss SRB total loss-absorbing capacity movement
USD m
Going concern capital
Swiss SRB
Common equity tier 1 capital as of 31.12.24
Operating profit / (loss) before tax
Current tax (expense) / benefit
Foreign currency translation effects, before tax
Accruals for proposed dividends to shareholders for 2025
1
Other
Common equity tier 1 capital as of 31.12.25
Loss-absorbing additional tier 1 capital as of 31.12.24
Issuance of high-trigger loss-absorbing additional tier 1 capital
Call of high-trigger loss-absorbing additional tier 1 capital
Call of low-trigger loss-absorbing additional tier 1 capital
Interest rate risk hedge, foreign currency translation and other effects
Loss-absorbing additional tier 1 capital as of 31.12.25
Total going concern capital as of 31.12.24
Total going concern capital as of 31.12.25
Gone concern loss-absorbing capacity
Tier 2 capital as of 31.12.24
Debt no longer eligible as gone concern loss-absorbing capacity due to residual tenor falling to below one year
Interest rate risk hedge, foreign currency translation and other effects
Tier 2 capital as of 31.12.25
TLAC-eligible unsecured debt as of 31.12.24
Issuance of TLAC-eligible unsecured debt
Call of TLAC-eligible unsecured debt
2
Instruments repurchased under the tender offers
Debt no longer eligible as gone concern loss-absorbing capacity due to residual tenor falling to below one year
Interest rate risk hedge, foreign currency translation and other effects
TLAC-eligible unsecured debt as of 31.12.25
Total gone concern loss-absorbing capacity as of 31.12.24
Total gone concern loss-absorbing capacity as of 31.12.25
Total loss-absorbing capacity
Total loss-absorbing capacity as of 31.12.24
Total loss-absorbing capacity as of 31.12.25
1 Reflects a proposed ordinary dividend distribution of USD 4.5bn and the appropriation of USD 4.5bn to a special dividend reserve, both subject to approval at the Annual General Meeting in the second quarter of
2026. The decision on the distribution of the special dividend is intended to be made at an Extraordinary General Meeting in the second half of 2026 and is subject to UBS AG meeting its capital requirements on a
standalone and consolidated level, and the outcome and timing of the implementation of the new regulatory regime in Switzerland. 2 Includes one debt instrument (ISIN US902613AU26) that ceased to be eligible
as gone concern capital when Group issued a notice of redemption of the instrument in the fourth quarter of 2025.
Additional information
Active management of sensitivity to foreign exchange movements
Group Treasury is mandated to minimize adverse effects from changes in foreign currency rates on our CET1 capital
and / or CET1 capital ratio of UBS AG consolidated. A significant portion of our CET1 capital and RWA is denominated
in Swiss francs, euro, pounds sterling and other currencies. In order to hedge the CET1 capital ratio, CET1 capital needs
to have foreign currency exposure, leading to foreign currency rates sensitivity of CET1 capital.
Consequently, it is not possible to simultaneously fully hedge CET1 capital and the CET1 capital ratio. As the proportion
of RWA denominated in currencies other than the US dollar outweighs CET1 capital in such currencies, a significant
appreciation of the US dollar against such currencies could benefit our capital ratios, while a significant depreciation of
the US dollar against these currencies could adversely affect our capital ratios.
The UBS AG Asset and Liability Committee has mandated Group Treasury to adjust the currency mix of CET1 capital of
UBS AG consolidated, within limits set by the Board of Directors, to balance the effect of foreign exchange movements
on CET1 capital and the CET1 capital ratio. Limits are in place for the sensitivity of both CET1 capital and the CET1 capital
ratio to an appreciation or depreciation of 10% in the value of the US dollar against other currencies.
Sensitivity to currency movements
Risk-weighted assets
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our RWA by
USD 23bn and our CET1 capital by USD 2.7bn as of 31 December 2025 (31 December 2024: USD 21bn and USD 2.6bn,
respectively) and decreased our CET1 capital ratio by 11 basis points (31 December 2024: 11 basis points). Conversely,
a 10% appreciation of the US dollar against other currencies would have decreased our RWA by USD 21bn and our
CET1 capital by USD 2.5bn (31 December 2024: USD 19bn and USD 2.3bn, respectively) and increased our CET1
capital ratio by 10 basis points (31 December 2024: 11 basis points).
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 94
Leverage ratio denominator
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our LRD by
USD 109bn as of 31 December 2025 (31 December 2024: USD 97bn) and decreased our CET1 leverage ratio by 12 basis
points (31 December 2024: 13 basis points). Conversely, a 10% appreciation of the US dollar against other currencies
would have decreased our LRD by USD 98bn (31 December 2024: USD 88bn) and increased our CET1 leverage ratio by
12 basis points (31 December 2024: 13 basis points).
The aforementioned sensitivities do not consider foreign currency translation effects related to defined benefit plans other
than those related to the currency translation of the net equity of foreign operations.
Capital and capital ratios of our significant regulated subsidiaries
UBS AG has contributed a significant portion of capital to, and provided substantial liquidity to, its subsidiaries. Many of
these subsidiaries are subject to regulations requiring compliance with minimum capital, liquidity and similar
requirements. Supervisory authorities generally have discretion to impose higher requirements, or to otherwise limit the
activities of subsidiaries. Supervisory authorities also may require entities to measure capital and leverage ratios on a
stressed basis and may limit the ability of the entity to engage in new activities or take capital actions based on the results
of those tests.
›
Refer to the “Significant regulated subsidiary and sub-group information” section of the UBS Group Annual Report 2025,
available under “Annual reporting” at
ubs.com/investors
, for more information about the regulatory capital components and
capital ratios of our significant regulated subsidiaries determined under the regulatory framework of each subsidiary’s home
jurisdiction
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
,
for more capital and
other regulatory information about our significant regulated subsidiaries and sub-groups
Joint liability of UBS AG and UBS Switzerland AG
In June 2015, upon the transfer of the Personal & Corporate Banking and Global Wealth Management businesses booked
in Switzerland from UBS AG to UBS Switzerland AG, UBS AG and UBS Switzerland AG assumed joint liability for
obligations transferred to UBS Switzerland AG and existing at UBS AG, respectively. Under certain circumstances, the
Swiss Banking Act and FINMA’s Banking Insolvency Ordinance authorize FINMA to modify, extinguish or convert to
common equity liabilities of a bank in connection with a resolution or insolvency of such bank.
The joint liability amounts have declined as obligations matured, terminated or were novated following the transfer date.
As of 31 December 2025, the liability of UBS Switzerland AG amounted to CHF 1.5bn (USD 1.9bn), a decrease of
CHF 0.9bn (USD 0.7bn) compared with 31 December 2024. The respective liability of UBS AG has been substantially
extinguished.
Risk-weighted assets
RWA development in 2025
During 2025, RWA decreased by USD 5.3bn to USD 489.8bn, driven by a USD 15.5bn decrease resulting from asset size
and other movements, an USD 8.6bn decrease as a result of the implementation of the final Basel III standards and a
decrease of USD 4.2bn resulting from model updates and other methodology changes. These decreases were partly
offset by a USD 23.1bn increase from currency effects.
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, for more information
about RWA movements and definitions of RWA movement key drivers on a UBS Group AG consolidated basis
Movement in risk-weighted assets, by key driver
USD bn
RWA as of
31.12.24
Currency
effects
Impact from the
implementation
of final Basel III
standards
Model updates
and other
methodology
changes
Asset size and
other
1
RWA as of
31.12.25
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
1 Includes the Pillar 3 categories “Asset size”, “Credit quality of counterparties”, “Acquisitions and disposals” and “Other”. For more information, refer to the 31 December 2025 Pillar 3 Report, available under
“Pillar 3 disclosures” at ubs.com/investors. 2 Includes settlement risk, credit valuation adjustments, equity and investments in funds exposures in the banking book, and securitization exposures in the banking book.
3 Non-counterparty-related risk includes deferred tax assets recognized for temporary differences, property, equipment, software and other items.
Credit and counterparty credit risk
Credit and counterparty credit risk RWA increased by USD 8.1bn to USD 300.4bn as of 31 December 2025, driven by a
USD 22.2bn increase from currency effects, partly offset by a USD 6.1bn decrease as a result of the implementation of
the final Basel III standards, a USD 4.2bn decrease reflecting model updates and methodology changes, and a decrease
of USD 3.7bn from asset size and other movements.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 95
In Switzerland, the amendments to the CAO that incorporate the final Basel III standards into Swiss law entered into force
on 1 January 2025. The main changes relate to restrictions on using internal ratings-based (IRB) models for exposures to
financial institutions and large corporate clients, a revised standardized approach with more granular risk weights, and a
revised credit valuation adjustment framework.
The aforementioned impact from the implementation of the final Basel III standards on credit and counterparty credit risk
RWA of USD 6.1bn was primarily due to the removal of a 1.06 multiplier on risk weights calculated using IRB models,
which more than offset other changes, including the establishing of floors and the introduction of regulatory-mandated
loss given default parameters to financial institutions and large corporate clients.
Asset size and other movements decreased RWA by USD 3.7bn, mainly due to lower RWA in Non-core and Legacy,
primarily driven by our actions to actively unwind the portfolio, in addition to the natural roll-off, and, to a lesser extent,
also due to lower RWA from derivatives, mainly in the Investment Bank. These decreases were partly offset by higher
RWA from high-quality liquid assets, and also by loans and loan commitments across Personal & Corporate Banking and
the Investment Bank.
Model updates and other methodology changes not related to the implementation of the final Basel III standards resulted
in a USD 4.2bn decrease in RWA, mainly reflecting lower RWA on Lombard lending, improvements in the model for
concentrated equity lending, the establishment of a new model for private equity subscription loans in Global Wealth
Management, and an update in loss given default models for cash and balances at central banks. These decreases were
partly offset by increases in RWA following the migration of exposures from Credit Suisse models.
›
Refer to “Credit risk” in the “Risk management and control” section of this report for more information about credit and
counterparty credit risk developments
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, for more information
about credit and counterparty credit risk developments on a UBS Group AG consolidated basis
Market risk
Market risk RWA decreased by USD 3.4bn to USD 23.8bn as of 31 December 2025, primarily driven by a decrease of
USD 9.9bn due to asset size and other movements in the Investment Bank’s Global Markets business and de-risking
within Non-core and Legacy, partly offset by a USD 6.5bn increase due to the implementation of the Fundamental Review
of the Trading Book (the FRTB) framework.
The final Basel III standards on the minimum capital requirements for market risk from the BCBS, known as the FRTB
framework, entered into force in Switzerland on 1 January 2025. UBS currently applies the standardized approach of the
FRTB framework, in which minimum market risk capital requirements are computed on the basis of three components:
the sensitivities-based method (the SBM), the default risk charge (the DRC) and the residual risk add-on (the RRAO). The
SBM captures the delta, vega and curvature risk of the underlying trading positions, and the DRC captures the jump-to-
default risk in positions subject to equity and credit risk. In addition, positions that may not be adequately capitalized by
the SBM and the DRC additionally attract an RRAO charge. The new FRTB framework replaced the value-at-risk (VaR)-
and stressed VaR-based Basel 2.5 market risk framework.
›
Refer to “Market risk” in the “Risk management and control” section of this report for more information about market risk
developments
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, for more information
about market risk developments on a UBS Group AG consolidated basis
Operational risk
Operational risk RWA decreased by USD 10.0bn to USD 135.4bn as of 31 December 2025, primarily driven by a decrease
of USD 9.0bn as a result of the implementation of the standardized approach for determining regulatory capital and a
decrease of USD 1.0bn from asset size and other movements. The allocation methodology for operational risk RWA has
been adjusted to better reflect the contributions of each division to the RWA calculation under the final Basel III standards.
Under the revised approach, allocations are based on historical losses and revenues in approximate proportion to the
weight that these factors have in the standardized approach calculation.
The final Basel III standards on the operational risk capital requirements entered into force in Switzerland on 1 January
2025. The standardized approach is based on the business indicator component, which is derived from average revenue-
based indicators over a period of three years, as well as the internal loss multiplier, which is derived from average historical
operational losses over a period of ten years. The new framework replaced the advanced measurement approach.
›
Refer to “Non-financial risk capital measurement” in the “Risk management and control” section of this report for more
information about the standardized approach, which has been used to measure operational risk exposure and calculate
operational risk regulatory capital
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 96
Risk-weighted assets, by business division and Group Items
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Manage-
ment
Investment
Bank
Non-core and
Legacy
Group
Items
Total
RWA
31.12.25
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
31.12.24
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
31.12.25 vs 31.12.24
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
1 Includes settlement risk, credit valuation adjustments, equity and investments in funds exposures in the banking book, and securitization exposures in the banking book. 2 Non-counterparty-related risk includes
deferred tax assets recognized for temporary differences (31 December 2025: USD 17.7bn; 31 December 2024: USD 17.9bn), as well as property, equipment, software and other items (31 December 2025: USD 12.5bn;
31 December 2024: USD 12.2bn).
Leverage ratio denominator
LRD development in 2025
During 2025, the LRD increased by USD 99.6bn to USD 1,622.9bn, mainly driven by a USD 110.6bn increase from
currency effects and a USD 28.8bn increase as a result of the implementation of the final Basel III standards, partly offset
by a USD 39.8bn decrease from asset size and other movements.
Movement in leverage ratio denominator, by key driver
USD bn
LRD as of
31.12.24
Currency
effects
Impact from the
implementation
of final Basel III
standards
Asset size and
other
LRD as of
31.12.25
On-balance sheet exposures (excluding derivatives and securities financing transactions)
1
Derivative exposures
Securities financing transaction exposures
Off-balance sheet items
1
Total exposures
1 From the first quarter of 2025 onward, we have included the assets deducted from tier 1 capital items in On-balance sheet exposures and Off-balance sheet items. Comparative-period information has been amended
to reflect the disclosure format changes for the new final Basel III standards. Refer to the UBS AG Annual Report 2024, available under “Annual reporting” at ubs.com/investors, for more information about previously
published disclosures.
The impact from the implementation of the final Basel III standards on the LRD was an increase of USD 28.8bn. In
Switzerland, the amendments to the CAO that incorporate the final Basel III standards into Swiss law entered into force
on 1 January 2025. The increase was mainly in derivatives, as a result of the standardized approach for counterparty
credit risk, including the application of the prescribed 1.4× multiplier to address risks, for example wrong-way risk, that
are not directly captured in the framework. This was partly offset by decreases in off-balance sheet positions resulting
from a change to credit conversion factors and on-balance sheet exposures due to an alignment of the consolidation
scope between RWA and LRD.
Asset size and other movements resulted in a USD 39.8bn decrease in the LRD.
On-balance sheet exposures (excluding derivatives and securities financing transactions) increased by USD 23.2bn, mainly
due to increases in high-quality liquid asset portfolio securities, increases in lending assets driven by positive net new
loans, mainly in Global Wealth Management, and higher trading assets reflecting higher inventory held to hedge client
positions, as well as market-driven increases in the Investment Bank. These increases were partly offset by a decrease in
cash and balances at central banks.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Capital management 97
Derivatives exposures decreased by USD 23.3bn, mainly due to roll-offs of foreign currency contracts and higher netting
in the Investment Bank. There was also a decrease from unwinding activities in Non-core and Legacy.
Securities financing transaction exposures decreased by USD 36.7bn, mainly reflecting roll-offs of cash reinvestment
trades in Group Treasury, partly offset by an increase in brokerage receivables mainly reflecting higher levels of client
activity in the Investment Bank.
Off-balance sheet items exposures decreased by USD 3.0bn, mainly driven by a decrease in commitments.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet and off-
balance sheet movements
Leverage ratio denominator, by business division and Group Items
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
31.12.25
On-balance sheet exposures (excluding derivatives and securities
financing transactions)
1
Derivative exposures
Securities financing transaction exposures
Off-balance sheet items
1
Total exposures
31.12.24
On-balance sheet exposures (excluding derivatives and securities
financing transactions)
1
Derivative exposures
Securities financing transaction exposures
Off-balance sheet items
1
Total exposures
31.12.25 vs 31.12.24
On-balance sheet exposures (excluding derivatives and securities
financing transactions)
Derivative exposures
Securities financing transaction exposures
Off-balance sheet items
Total exposures
1 From the first quarter of 2025 onward, we have included the assets deducted from tier 1 capital items in On-balance sheet exposures and Off-balance sheet items. Comparative-period information has been amended
to reflect the disclosure format changes for the new final Basel III standards. Refer to the UBS AG Annual Report 2024, available under “Annual reporting” at ubs.com/investors, for more information about previously
published disclosures.
Liquidity and funding management
We manage the structural risks of our balance sheet, including interest rate risk, structural foreign exchange risk and
collateral risk, as well as liquidity and funding risk. This section provides information about liquidity and funding
governance, stress testing, management, contingency planning, and regulatory requirements. The balances disclosed in
this section represent year-end positions, unless indicated otherwise. Intra-period balances fluctuate in the ordinary
course of business and may differ from year-end positions.
Strategy, objectives and governance
Audited |
Our management of liquidity and funding ensures that our business franchises are protected and that our internal
and regulatory liquidity and funding requirements are prudently managed. We measure liquidity and funding risk using
internal and regulatory models and metrics. We define and implement internal stress testing across different time
horizons, scenarios and currencies to ensure we have sufficient liquidity and funding, while remaining compliant with
regulatory liquidity and funding requirements. Our liquidity and funding strategy is proposed by Group Treasury and
approved by the Asset and Liability Committee (the ALCO) of UBS AG, which is a committee of the Executive Board (the
EB) and is overseen by the Board of Directors (the BoD).
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 98
Liquidity and funding limits and other constraints (including early-warning indicators) are set at UBS AG (consolidated)
and, where appropriate, at legal entity and business-division levels. Key limits (which are under the authority of the BoD)
and constraints linked to these limits are reviewed and reconfirmed at least once a year by the BoD of UBS AG, the EB of
UBS AG, the ALCO of UBS AG and the Group Treasurer, taking into consideration the Group’s business strategy and risk
appetite. Treasury Risk Control provides independent oversight over liquidity and funding risk, including the setting of
key internal limits and early-warning indicators associated with these limits.
›
Refer to the “Corporate governance” and “Risk management and control” sections of this report for more information
Group Treasury monitors and oversees the implementation and execution of our liquidity and funding strategy and
manages liquidity and funding risk within the limits and other relevant constraints, thereby adhering to the internal risk
appetite and regulatory requirements. Group Treasury manages our stock of high-quality liquid assets (HQLA), including
the operational cash position, and our short- and long-term debt issuances. To safeguard our liquidity and funding
position in times of stress, Group Treasury maintains a Contingency Funding Plan and contributes to plans for recovery
and resolution, defining crisis management processes throughout the crisis continuum. Group Treasury reports on the
liquidity and funding status and position, at least monthly, to the ALCO of UBS AG and the Risk Committee of the BoD,
with more frequent reporting in times of stress.
Liquidity and funding stress testing
Audited |
Our liquidity and funding risk appetite objective is to ensure that the firm has sufficient liquidity to survive a severe
three-month idiosyncratic and market-wide liquidity stress event and to ensure that the firm has sufficient long-term
funding to maintain franchise assets at a constant level under stressed market conditions for up to one year, in both
cases without government support and allowing for discrete management actions.
Group Treasury maintains a diversified, high-quality pool of unencumbered liquid assets under Treasury control. The liquid
asset portfolio is managed dynamically, in order to remain at all times within the internal risk appetite and other relevant
Group, UBS AG and subsidiary liquidity and funding requirements.
Our liquidity and funding stress testing covers three main stress scenarios: a combined (i.e. market and idiosyncratic)
scenario, an idiosyncratic scenario and a structural market-wide scenario.
›
Refer to “Risk measurement” in the “Risk management and control” section of this report for more information about stress
testing
Combined (market and idiosyncratic) scenario
In this scenario, UBS faces the consequences of both a severely deteriorated macroeconomic and financial market
environment and a UBS-specific event, resulting in an acute loss of liquidity over a relatively short period of time. This
scenario represents severe yet plausible events encompassing both market-wide and idiosyncratic elements, in which,
however, franchise client relationships are materially maintained.
UBS ensures that its liquidity risk appetite objective is met by maintaining a cumulative liquidity surplus on each day in
the three-month stress horizon. The liquidity gap is assessed by modeling the stressed liquidity value of the liquidity buffer
and stressed liquidity inflows and outflows under the scenario.
Idiosyncratic scenario
In this three-month stress scenario, UBS is subject to a significant and unforeseen event specific to UBS. This materially
damages the market’s perception of the reputation and creditworthiness of UBS. The event occurs in otherwise benign
macroeconomic and financial market conditions. UBS’s difficulties throughout the scenario are limited to UBS and do not
trigger material market moves.
Structural market-wide scenario
In this scenario, UBS is subject to a significant deterioration of macroeconomic and financial market conditions globally.
Macroeconomic shocks result in deteriorated financial market conditions over the scenario horizon of one year. UBS is
assumed to be affected equally relative to other global financial institutions.
UBS ensures that its funding risk appetite objective is met by maintaining a positive cumulative behavioral liquidity gap
across the 3-month, 6-month, 9-month and 12-month tenors. The liquidity gap is assessed by modeling the stressed
liquidity value of the liquidity buffer and the stressed liquidity inflows and outflows under the scenario.
Management of liquidity and funding risk
Audited |
Group Treasury monitors the Group’s funding position, including concentration risk, aiming to ensure that UBS
maintains a well-balanced and diversified liability structure. Group Treasury also looks to create the optimal liability
structure to finance our businesses in a reliable and cost-efficient manner. Our funding activities are planned by analyzing
the overall liquidity and funding requirements, taking into account the amount of stable funding that would be needed
to support ongoing business activities through periods of difficult market conditions.
The funding strategy of UBS AG is set annually in the Funding Plan and is reviewed on an ongoing basis. The Funding
Plan is developed by Group Treasury and approved by the ALCO of UBS AG.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about the development of our
short- and long-term debt during 2025
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 99
Global Wealth Management and Personal & Corporate Banking provide significant, cost-efficient and stable sources of
funding. These include deposits and debt issued through the Swiss central mortgage institution
(Pfandbriefbank schweizerischer Hypothekarinstitute AG) and UBS’s covered bond programs, which use a portion of our
portfolio of Swiss residential mortgages as collateral to generate long-term funding. In addition, we have several short-,
medium- and long-term funding programs under which we issue senior unsecured debt and structured notes, as well as
short-term debt. These programs enable UBS to source funding from institutional and private investors who are active in
Europe, the US and Asia Pacific. Collectively, these broad product offerings and funding sources, together with the global
scope of our business activities, support our funding stability.
Internal funding and funds transfer pricing
We use our global liquidity and funding framework to govern the liquidity management of our branches and subsidiaries.
Group Treasury meets internal demands for funding by channeling funds from entities generating surplus cash to those
in need of financing, considering existing transfer restrictions.
Funding costs and benefits are allocated to our business divisions according to our liquidity and funding risk management
framework. Our internal funds transfer pricing system aims to balance funding supply and demand.
Credit ratings
Credit ratings can affect the cost and availability of funding, especially from wholesale unsecured sources. UBS’s credit
ratings can also influence the performance of some of our businesses and the levels of client and counterparty confidence.
Rating agencies take into account a range of factors when assessing creditworthiness and setting credit ratings. These
include the company’s strategy and business model, its franchise value and competitive position, stability and quality of
earnings, capital adequacy, risk profile and management, liquidity management, diversification of funding sources, asset
quality, and corporate governance. Credit ratings reflect the opinions of the rating agencies and can change at any time.
In evaluating our liquidity and funding requirements, we consider the potential effect of a reduction in our long-term
credit ratings and a corresponding reduction in short-term ratings. If our credit ratings were to be downgraded, rating
trigger clauses could result in an immediate cash settlement or the need to deliver additional collateral to counterparties
from contractual obligations related to over-the-counter (OTC) derivative positions and other obligations. Based on our
credit ratings as of 31 December 2025, in the event of a one-notch reduction in our long-term credit ratings of UBS AG,
UBS Europe SE and UBS Switzerland AG, we would have been required to provide USD 0.2bn in cash or other collateral.
In the event of a two-notch reduction, it would have been USD 0.5bn and for a three-notch downgrade, USD 0.8bn. In
the two- and three-notch scenarios the collateral requirements predominantly relate to OTC derivative positions.
During 2025, Moody’s Investors Service Limited changed the outlook on the long-term senior unsecured debt ratings of
UBS AG from negative to stable, and Fitch Ratings Ireland Limited changed the Outlook on Long-Term Issuer Default
Ratings of UBS AG to Positive from Stable.
›
Refer to “Liquidity and funding management are critical to UBS AG’s ongoing performance” in the “Risk factors” section of this
report for more information
Contingency Funding Plan
Audited |
We maintain our Contingency Funding Plan in preparation and as an action plan, aiming to ensure we maintain
sufficient liquidity to meet payment obligations in a liquidity and funding stress scenario. The plan specifies the processes,
tools and responsibilities that we have available to effectively manage liquidity and funding through these periods. Our
funding diversification and global scope help to protect our liquidity position in the event of a crisis. Our contingent
funding sources include our HQLA portfolios, available central bank-eligible non-HQLA collateral for liquidity facilities at
several major central banks, contingent reductions of trading portfolio assets, and other actions available to
management.
Liquidity coverage ratio
The liquidity coverage ratio (the LCR) measures the short-term resilience of a bank’s liquidity profile by assessing whether
sufficient HQLA are available to meet expected net cash outflows from a significant liquidity stress scenario, as defined
by the relevant regulator.
For UBS AG, HQLA are low-risk unencumbered assets under the control of Group Treasury that are easily and immediately
convertible into cash at little or no loss of value, in order to meet liquidity needs. Our HQLA predominantly consist of
assets that qualify as Level 1 in the LCR framework, including cash, central bank reserves and government bonds. HQLA
are held by UBS AG and its subsidiaries and may include amounts that are available to meet funding and collateral needs
in certain jurisdictions but are not readily available for use by UBS AG consolidated as a whole. These limitations are
typically the result of local regulatory requirements, including local LCR and large exposure requirements. Funds that are
effectively restricted in subsidiaries and branches are excluded from the calculation of UBS AG consolidated HQLA. On
this basis, USD 51.8bn of assets were excluded from our daily average UBS AG consolidated HQLA for the fourth quarter
of 2025. Amounts held in excess of local liquidity requirements that are not subject to other restrictions are generally
available for transfer within UBS AG consolidated.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 100
Consistent with the standards set by the Basel Committee on Banking Supervision (the BCBS), the Swiss Liquidity
Ordinance requires Swiss banks to maintain a minimum LCR requirement of at least 100% at all times. In a period of
financial stress, the Swiss Financial Market Supervisory Authority (FINMA) may permit banks to use their HQLA and allow
their LCR to temporarily fall below the minimum threshold. We monitor the LCR in all significant currencies in order to
manage any currency mismatches between HQLA and the net expected cash outflows in times of stress.
Our daily average LCR of UBS AG consolidated for the fourth quarter of 2025 was 176.2%, compared with 186.1% in
the fourth quarter of 2024, remaining above the prudential requirement communicated by FINMA.
The decrease in the average LCR was primarily driven by a USD 10.2bn increase in net cash outflows, to USD 188.4bn,
which was mainly attributable to higher outflows from customer and intercompany deposits, partly offset by higher net
inflows from securities financing transactions. HQLA were broadly stable at USD 331.7bn.
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
,
for more information
about the LCR on a UBS Group AG consolidated basis
Liquidity coverage ratio
USD bn, except where indicated
Average 4Q25
1
Average 4Q24
1
High-quality liquid assets
Total net cash outflows
2
Liquidity coverage ratio (%)
3
1 Calculated based on an average of 64 data points in the fourth quarter of 2025 and 64 data points in the fourth quarter of 2024. 2 Represents the net cash outflows expected over a stress period of 30 calendar
days. 3 Calculated after the application of haircuts and inflow and outflow rates, as well as, where applicable, caps on Level 2 assets and cash inflows.
Too-big-to-fail liquidity requirements
UBS AG remained compliant throughout 2025 with the too-big-to-fail (TBTF) liquidity requirements communicated by
FINMA for both the consolidated and standalone scopes. These additional liquidity requirements consider liquidity risks
over a 90-day time horizon that are not covered or not sufficiently covered by the 30-day LCR stress scenario. The
additional liquidity requirements are covered by eligible assets, which include, but are not limited to, available HQLA over
and above the LCR requirements.
Net stable funding ratio
The net stable funding ratio (the NSFR) framework is intended to limit overreliance on short-term wholesale funding, to
encourage a better assessment of funding risk across all on- and off-balance sheet items and to promote funding stability.
The NSFR has two components: available stable funding (ASF), as numerator, and required stable funding (RSF), as
denominator. ASF is the portion of capital and liabilities expected to be available over the period of one year. RSF is a
measure of the stable funding requirement of assets and off-balance sheet exposures based on their maturity,
encumbrance and other characteristics. Both the Swiss Liquidity Ordinance and the BCBS NSFR regulatory framework
require a ratio of at least 100% at all times.
As of 31 December 2025, the NSFR of UBS AG consolidated decreased 8.4 percentage points to 115.7%, remaining
above the prudential requirement communicated by FINMA.
ASF increased by USD 26.5bn to USD 873.5bn, predominantly reflecting higher customer deposits, largely due to
currency effects.
RSF increased by USD 72.8bn to USD 755.3bn, mainly driven by higher lending assets, largely due to currency effects,
and higher trading assets, partly offset by decreases in derivatives and cash collateral receivables on derivative instruments.
›
Refer to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
,
for more information
about the NSFR on a UBS Group AG consolidated basis
Net stable funding ratio
USD bn, except where indicated
31.12.25
31.12.24
Available stable funding (ASF)
Required stable funding (RSF)
Net stable funding ratio (%)
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 101
Balance sheet and off-balance sheet
The balances disclosed in this section represent year-end positions, unless indicated otherwise. Intra-period balances
fluctuate in the ordinary course of business and may differ from year-end positions. Refer to the “Consolidated financial
statements” section of this report for more information about the development of UBS AG’s financial position.
Balance sheet
Balance sheet assets
As of 31 December 2025, balance sheet assets totaled USD 1,617.2bn, an increase of USD 49.1bn compared with
31 December 2024.
Lending assets increased by USD 72.5bn, primarily driven by currency effects of approximately USD 60.0bn and positive
net new loans, mainly in Global Wealth Management. Other financial assets measured at fair value and Other financial
assets measured at amortized cost increased by USD 23.8bn and USD 12.7bn, respectively, primarily reflecting purchases
of securities in UBS AG’s high-quality liquid asset (HQLA) portfolio and currency effects. Trading assets increased by
USD 15.7bn, mainly in the Investment Bank, due to an increase in inventory held to hedge client positions, as well as
market-driven increases. Brokerage receivables increased by USD 9.7bn, primarily reflecting higher levels of client activity.
These increases were partly offset by a decrease of USD 40.5bn in Derivatives and cash collateral receivables on derivative
instruments, mainly in the Investment Bank. The decrease was driven by foreign currency contracts, mainly due to roll-
offs, partly offset by an increase in equity contracts, reflecting market-driven increases. In addition, there was a decrease
from unwinding activities in Non-core and Legacy. Securities financing transactions at amortized cost decreased by
USD 34.6bn, mainly reflecting roll-offs of cash reinvestment trades in Group Treasury. Cash and balances at central banks
decreased by USD 13.4bn, primarily due to outflows from purchases of securities in UBS AG’s HQLA portfolio, net
redemptions and the repurchase of long-term debt issued measured at amortized cost, higher lending activity levels, and
net new customer deposit outflows, partly offset by inflows from net roll-offs of securities financing transactions
measured at amortized cost and also by currency effects.
›
Refer to “Note 22 Restricted and transferred financial assets” in the “Consolidated financial statements” section of this report and,
on a UBS Group consolidated basis, to the 31 December 2025 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
,
for more information about on- and off-balance sheet assets that are pledged, restricted or unencumbered
Assets
As of
% change from
USD bn
31.12.25
31.12.24
31.12.24
Cash and balances at central banks
Lending
1
Securities financing transactions at amortized cost
Trading assets
Derivatives and cash collateral receivables on derivative instruments
Brokerage receivables
Other financial assets measured at amortized cost
Other financial assets measured at fair value
2
Non-financial assets
Total assets
1 Consists of Loans and advances to customers and Amounts due from banks. 2 Consists of Financial assets at fair value not held for trading and Financial assets measured at fair value through other comprehensive
income.
Balance sheet liabilities
Total liabilities as of 31 December 2025 were USD 1,528.0bn, an increase of USD 54.6bn compared with 31 December
2024.
Customer deposits increased by USD 46.8bn, primarily reflecting currency effects, partly offset by net new deposit
outflows, mainly in Global Wealth Management. Trading liabilities increased by USD 18.5bn, mainly in the Investment
Bank, due to an increase in inventory held to hedge client positions, as well as market-driven increases. Brokerage
payables increased by USD 13.2bn, primarily reflecting higher levels of client activity.
These increases were partly offset by a decrease of USD 26.0bn in Derivatives and cash collateral payables on derivative
instruments, mainly reflecting the same drivers as on the asset side.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 102
Equity
Equity attributable to shareholders decreased by USD 5,158m to USD 88,845m as of 31 December 2025.
This decrease was mainly driven by the 2024 dividend distribution of USD 13,000m to UBS Group AG, partly offset by
total comprehensive income attributable to shareholders of USD 7,772m, reflecting net profit of USD 3,541m and other
comprehensive income (OCI) of USD 4,231m. OCI mainly included OCI related to foreign currency translation of
USD 3,381m and cash flow hedge OCI of USD 1,295m, partly offset by negative own credit OCI of USD 567m.
›
Refer to the “UBS AG consolidated performance” and “Consolidated financial statements” sections of this report for more
information about OCI
›
Refer to the “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” table in the
“Capital management” section of this report for more information about the effects of OCI on common equity tier 1 capital
Liabilities and equity
As of
% change from
USD bn
31.12.25
31.12.24
31.12.24
Short-term borrowings
1,2
Securities financing transactions at amortized cost
Customer deposits
Funding from UBS Group AG measured at amortized cost
Debt issued designated at fair value and long-term debt issued measured at amortized cost
2
Trading liabilities
Derivatives and cash collateral payables on derivative instruments
Brokerage payables
Other financial liabilities measured at amortized cost
Other financial liabilities designated at fair value
Non-financial liabilities
Total liabilities
Share capital
Share premium
Retained earnings
Other comprehensive income
3
Total equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
1 Consists of short-term debt issued measured at amortized cost and Amounts due to banks, which includes amounts due to central banks. 2 The classification of debt issued measured at amortized cost into short-
term and long-term is based on original contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year. This classification does not consider any early
redemption features. 3 Excludes other comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 103
Liabilities, by product and currency
USD equivalent
All currencies
of which: USD
of which: CHF
of which: EUR
USD bn
31.12.25
31.12.24
31.12.25
31.12.24
31.12.25
31.12.24
31.12.25
31.12.24
Short-term borrowings
58.3
53.9
25.6
22.5
5.8
5.7
13.5
11.7
of which: amounts due to banks
24.4
23.3
7.2
8.1
5.2
5.4
3.8
3.1
of which: short-term debt issued
1,2
33.9
30.5
18.4
14.5
0.6
0.3
9.7
8.6
Securities financing transactions at amortized cost
16.2
14.8
8.6
7.9
5.8
3.8
0.8
2.9
Customer deposits
796.3
749.5
307.6
312.5
343.0
298.2
74.9
71.5
of which: demand deposits
265.8
225.0
57.3
55.7
140.7
108.7
36.4
33.2
of which: retail savings / deposits
230.8
182.3
38.1
34.9
187.5
143.3
5.1
4.0
of which: sweep deposits
41.5
41.9
41.5
41.9
0.0
0.0
0.0
0.0
of which: time deposits
258.3
300.3
170.8
179.9
14.8
46.1
33.4
34.3
Funding from UBS Group AG measured at amortized cost
110.6
107.9
74.9
74.4
2.7
2.6
29.4
27.6
Debt issued designated at fair value and long-term debt issued
measured at amortized cost
2
173.9
173.1
77.6
86.2
43.0
40.5
38.9
30.4
Trading liabilities
53.7
35.2
20.3
14.4
1.5
1.3
15.5
10.0
Derivatives and cash collateral payables on derivative instruments
191.0
217.0
165.2
183.4
2.9
4.4
13.5
18.3
Brokerage payables
62.2
49.0
49.2
38.1
0.8
0.5
3.4
3.4
Other financial liabilities measured at amortized cost
16.6
21.8
8.6
12.9
3.1
3.2
1.7
1.9
Other financial liabilities designated at fair value
35.3
34.0
7.7
6.5
0.1
0.1
4.1
5.6
Non-financial liabilities
13.8
17.0
6.5
8.7
3.1
3.2
1.4
2.5
Total liabilities
1,528.0
1,473.4
751.7
767.5
411.7
363.3
197.0
185.8
1 Short-term debt issued consists of certificates of deposit, commercial paper, acceptances and promissory notes, and other money market paper. 2 The classification of debt issued measured at amortized cost into
short-term and long-term is based on original contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year. This classification does not consider any
early redemption features.
Off-balance sheet
In the normal course of business, UBS AG enters into transactions where, pursuant to IFRS Accounting Standards, the
maximum contractual exposure may not be recognized in whole or in part on its balance sheet. Therefore, in certain
instances the amount recognized on the balance sheet does not represent the full gain or loss potential inherent in such
transactions. These transactions include derivative instruments, guarantees, loan commitments and similar arrangements.
The following paragraphs provide more information about certain off-balance sheet arrangements. Additional off-
balance sheet information is primarily provided in Notes 9, 10, 17, 19, 20h, 22 and 27 in the “Consolidated financial
statements” section of this report and on a UBS Group AG consolidated basis in the 31 December 2025 Pillar 3 Report,
available under “Pillar 3 disclosures” at
ubs.com/investors
.
Guarantees, loan commitments and similar arrangements
UBS AG issues various forms of guarantees, commitments to extend credit, standby and other letters of credit, forward
starting transactions, note issuance facilities, and revolving underwriting facilities. With the exception of related
premiums, generally these guarantees and similar obligations are kept as off-balance sheet items, unless a provision to
cover probable losses or expected credit losses is required.
Guarantees represent irrevocable assurances that, subject to the satisfying of certain conditions, UBS AG will make
payments if its clients fail to fulfill their obligations to third parties. As of 31 December 2025, the net exposure (i.e. gross
values less sub-participations) from guarantees and similar instruments was USD 45.8bn, compared with USD 38.4bn as
of 31 December 2024. The increase of USD 7.4bn was mainly driven by an increase in sponsored repo clearing in Group
Treasury. Fee income from issuing guarantees compared with total net fee and commission income was insignificant for
2025 and 2024.
UBS AG also enters into commitments to extend credit in the form of credit lines available to secure the liquidity needs
of clients. For the majority of irrevocable loan commitments, UBS AG is committed to provide credit at any time within a
contractual maturity period of up to three years from the balance sheet date, i.e. 31 December 2025. During 2025,
Irrevocable loan commitments increased by USD 2.5bn, mainly driven by currency effects. Committed unconditionally
revocable credit lines decreased by USD 25.8bn, mainly driven by decreases in facilities provided to clients in Personal &
Corporate Banking and Global Wealth Management, partly offset by currency effects. Forward starting reverse repurchase
and securities borrowing agreements decreased by USD 14.2bn, reflecting a decrease in levels of business division activity
in short-dated securities financing transactions.
Off-balance sheet
As of
% change from
USD bn
31.12.25
31.12.24
31.12.24
Guarantees
1,2
45.8
38.4
19
Irrevocable loan commitments
1
82.1
79.6
3
Committed unconditionally revocable credit lines
123.1
148.9
(17)
Forward starting reverse repurchase and securities borrowing agreements
10.7
24.9
(57)
1 Guarantees and irrevocable loan commitments are shown net of sub-participations. 2 Includes guarantees measured at fair value through profit or loss.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 104
If customers fail to meet their obligations, the maximum exposure to credit risk of UBS AG is generally the contractual
amount of these instruments. The risk is similar to the risk involved in extending loan facilities and is subject to the same
risk management and control framework. In 2025, UBS AG recognized net credit loss expenses of USD 42m related to
irrevocable loan commitments, guarantees and other credit facilities in the scope of expected credit loss measurement,
compared with net credit loss releases of USD 11m in 2024. Provisions recognized for irrevocable loan commitments,
guarantees and other credit facilities in the scope of expected credit loss measurement were USD 347m as of
31 December 2025, compared with USD 332m as of 31 December 2024.
›
Refer to “Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement” and “Note 19
Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more information about
provisions for expected credit losses
For certain obligations, UBS AG enters into partial sub-participations to mitigate various risks from guarantees and
irrevocable loan commitments. A sub-participation is an agreement by another party to take a share of the loss in the
event that the obligation is not fulfilled by the obligor and, where applicable, to fund a part of the credit facility. UBS AG
retains the contractual relationship with the obligor, and the sub-participant has only an indirect relationship. Generally,
UBS AG only enters into sub-participation agreements with banks to which it ascribes a credit rating equal to or better
than that of the obligor.
UBS AG also provides representations, warranties and indemnifications to third parties in the normal course of business.
Support provided to non-consolidated investment funds
In 2025, UBS AG did not provide material support, financial or otherwise, to unconsolidated investment funds when it
was not contractually obligated to do so, nor does it currently have an intention to do so.
Clearing house and exchange memberships
UBS AG is a member of numerous securities and derivative exchanges and clearing houses. In connection with some of
these memberships, UBS AG may be required to pay a share of the financial obligations of another member that defaults,
or UBS AG may be otherwise exposed to additional financial obligations. While the membership rules vary, obligations
generally would arise only if the exchange or clearing house had exhausted its resources. UBS AG considers the probability
of a material loss due to such obligations to be remote.
Deposit insurance
Swiss banking law and the deposit insurance system require Swiss banks and securities dealers to jointly guarantee an
amount of up to CHF 7.9bn for privileged client deposits in the event that a Swiss bank or securities dealer becomes
insolvent. As of 31 December 2025, FINMA estimates UBS AG’s share in the deposit insurance system to be CHF 1.5bn.
This represents a contingent payment obligation and exposes UBS AG to additional risk. As of 31 December 2025,
UBS AG considered the probability of a material loss from its obligations to be remote.
UBS AG is also subject to, or is a member of, other deposit protection schemes in other countries. However, no contingent
payment obligation existed as of 31 December 2025 from any other material scheme.
Material cash requirements
The material cash requirements of UBS AG as of 31 December 2025 are represented by the residual contractual maturities
for non-derivative and non-trading financial liabilities included in the table presented in “Note 23b Maturity analysis of
financial liabilities on an undiscounted basis” in the “Consolidated financial statements” section of this report. Included
in the table are Funding from UBS Group AG measured at amortized cost (USD 145.7bn), Debt issued measured at
amortized cost (USD 106.6bn) and Debt issued designated at fair value (USD 116.1bn). The amounts represent estimated
future interest and principal payments on an undiscounted basis.
In the normal course of business, UBS AG also issues or enters into various forms of guarantees, irrevocable loan
commitments and other similar arrangements that may result in an outflow of cash in the future. The maturity profile of
these obligations, which are presented off-balance sheet, are included in “Note 23b Maturity analysis of financial
liabilities on an undiscounted basis” in the “Consolidated financial statements” section of this report. Refer to
“Guarantees, loan commitments and similar arrangements” in this section for more information.
Cash flows
As we are a global financial institution, our cash flows are complex and often may bear little relation to our net earnings
and net assets. Consequently, we believe that a traditional cash flow analysis is less meaningful when evaluating our
liquidity position than the liquidity, funding and capital management frameworks and measures described elsewhere in
this section.
›
Refer to the “Liquidity and funding management” section of this report for more information
Cash and cash equivalents
As of 31 December 2025, cash and cash equivalents totaled USD 231.0bn, a decrease of USD 12.4bn compared with
31 December 2024, driven by net cash outflows used in investing and financing activities. These effects were partly offset
by net cash inflows from operating activities and USD 19.1bn of positive foreign currency effects, largely reflecting the
weakening of the US dollar against the Swiss franc in 2025.
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 105
Operating activities
Net cash inflows from operating activities were USD 24.6bn in 2025, compared with net outflows of USD 27.1bn in
2024. The net positive change in operating assets and liabilities of USD 29.0bn was mainly driven by a USD 40.5bn
decrease in receivables from securities financing transactions measured at amortized cost and a USD 24.9bn positive
change in financial assets and liabilities at fair value held for trading and derivative financial instruments. These effects
were partly offset by a USD 13.0bn negative movement in financial assets at fair value not held for trading and other
financial assets and liabilities, outflows of USD 12.5bn into loans and advances to customers, and outflows of USD 9.3bn
due to a decrease in customer deposits. Non-cash items included in net profit and other adjustments are mainly to remove
the net impact of non-cash effects on the balance sheet, such as foreign currency effects.
Investing activities
Investing activities resulted in net cash outflows of USD 22.3bn in 2025, compared with USD 122.4bn of net cash inflows
in 2024, primarily reflecting USD 11.5bn of net cash outflows from financial assets measured at fair value and USD 9.8bn
of net cash outflows from debt securities measured at amortized cost, both largely reflecting net purchases of securities
in our HQLA portfolio.
Financing activities
Financing activities resulted in net cash outflows of USD 33.8bn in 2025, compared with USD 32.1bn in 2024, mainly
driven by a USD 21.1bn net repayment of debt issued designated at fair value and long-term debt issued measured at
amortized cost, and a dividend distribution of USD 13.0bn to UBS Group AG. These effects were partly offset by inflows
of USD 1.7bn from net issuances of short-term debt issued measured at amortized cost.
›
Refer to “Primary financial statements and share information” in the “Consolidated financial statements” section of this report for
more information about cash flows
Statement of cash flows (condensed)
For the year ended
USD bn
31.12.25
31.12.24
Net cash flow from / (used in) operating activities
Net cash flow from / (used in) investing activities
Net cash flow from / (used in) financing activities
Effects of exchange rate differences on cash and cash equivalents
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the end of the year
Annual Report 2025 |
Risk, capital, liquidity and funding, and balance sheet | Currency management 106
Currency management
Strategy, objectives and governance
Group Treasury focuses on three main areas of currency risk management: (i) currency-matched funding and hedging of
non-US-dollar net investments; (ii) the sell-down of foreign currency profits and losses under IFRS Accounting Standards;
and (iii) selective hedging of expected non-US-dollar profits and losses to further mitigate the effect of structural
imbalances in the balance sheet.
Currency-matched funding and hedging of non-US-dollar net investments
For monetary balance sheet items and other investments, as far as it is practical and efficient, UBS AG follows the principle
of matching the currencies of its assets and liabilities for funding purposes. This avoids profits and losses arising from the
translation of non-US-dollar assets and liabilities.
Net investment hedge accounting is applied to non-US-dollar core investments to balance the effect of foreign exchange
movements on both common equity tier 1 (CET1) capital and the CET1 capital ratio.
›
Refer to “Note 1 Summary of material accounting policies” and “Note 24 Hedge accounting” in the “Consolidated financial
statements” section of this report for more information
›
Refer to the “Capital management” section of this report for more information about UBS AG’s active management of sensitivity
to currency movements and the effect thereof on the key ratios
Sell-down of non-US-dollar profits and losses
Income statement items of UBS AG subsidiaries and branches with a functional currency other than the US dollar are
translated into US dollars at average exchange rates. To reduce the profit-and-loss volatility from the translation of
previously recognized earnings in foreign currencies, Group Treasury centralizes the profits and losses (under IFRS
Accounting Standards) arising in UBS AG and its branches and sells or buys the profit or loss for US dollars on a monthly
basis. UBS AG subsidiaries follow a similar monthly sell-down process into their own functional currencies. The equity in
subsidiaries and branches with a functional currency other than the US dollar is integrated and managed as part of
UBS AG’s net investment hedge accounting program.
Annual Report 2025 |
Corporate governance 107
Corporate governance
Management report
Audited information according to the Swiss law and applicable regulatory
requirements and guidance
Disclosures provided are in line with the requirements of the Swiss Code of Obligations (tables containing such
information are marked as “Audited” throughout this section), as well as other applicable regulations and guidance.
Table of contents
108
Corporate governance
108
Operational structure
108
Share capital structure
109
Shareholders’ participation rights
110
Board of Directors
120
Executive Board
129
Change of control and defense measures
129
Auditors
131
Information policy
Annual Report 2025 |
Corporate governance 108
Corporate governance
UBS AG is incorporated and domiciled in Switzerland and operates under Art. 620 et seq. of the Swiss Code of Obligations
and Swiss banking law as an
Aktiengesellschaft
, a corporation limited by shares. The addresses and telephone numbers
of the two registered offices of UBS AG are: Bahnhofstrasse 45, CH-8001 Zurich, Switzerland, telephone +41-44-234 11
11; and Aeschenvorstadt 1, CH-4051 Basel, Switzerland, telephone +41-61-288 50 50. The corporate identification
number is CHE-101.329.561.
The company was established with unlimited duration on 29 June 1998, when Union Bank of Switzerland and Swiss
Bank Corporation merged to form UBS AG. On 31 May 2024, Credit Suisse AG merged with and into UBS AG. UBS AG
is a regulated bank in Switzerland and is 100% owned by UBS Group AG, the ultimate parent of the UBS Group. UBS
AG’s purpose, in accordance with art. 2 of its Articles of Association, as amended on 23 April 2024, is the operation of
a bank and its scope extends to a full range of financial services activities in Switzerland and abroad.
As a non-US company with securities listed on the New York Stock Exchange (the NYSE), UBS AG complies with all
relevant corporate governance standards applicable to foreign private issuers listing debt securities. In addition, it also
follows the standards established in the Swiss Code of Best Practice for Corporate Governance. The Organization
Regulations of UBS AG, adopted by the Board of Directors of UBS AG (the BoD) based on Art. 716b of the Swiss Code
of Obligations and Art. 24 and 26 of the Articles of Association of UBS AG (the AoA), constitute UBS AG’s primary
corporate governance guidelines.
Operational structure
Operational structure
As at 31 December 2025, the operational structure of UBS AG is composed of the Global Wealth Management, Personal
& Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy business divisions, as well as
Group functions.
›
Refer to the “Our businesses” section of this report for more information about our business divisions and Group functions
Share capital structure
Ordinary share capital
At the end of 2025, UBS AG had 3,858,408,466 issued fully paid registered shares, with a nominal value of USD 0.10
each, equating to a share capital of USD 385,840,846.60.
Under Swiss company law, shareholders must approve, in a general meeting of shareholders, any increase or reduction
in the ordinary share capital, the creation of conditional or conversion share capital, and the introduction of a capital
band or reserve capital.
Conditional capital
At the end of 2025, the following conditional capital was available to the BoD.
–
Conditional capital in the amount of USD 38,000,000, for the issuance of a maximum of 380,000,000 fully paid
registered shares with a nominal value of USD 0.10 each, to be issued through the voluntary or mandatory exercise of
conversion rights and / or warrants granted in connection with the issuance of bonds or similar financial instruments
on national or international capital markets. This conditional capital allowance was approved at the Extraordinary
General Meeting (the EGM) held on 26 November 2014, having originally been approved at the Annual General
Meeting (the AGM) of UBS AG on 14 April 2010. The BoD has not made use of such allowance.
›
Refer to article 4a of the AoA for more information about the terms and conditions of the issue of shares out of existing
conditional capital – the AoA are available at
Annual Report 2025 |
Corporate governance 109
Conversion capital
On 31 December 2025, UBS AG had conversion capital in the amount of USD 70,000,000, for the issuance of a maximum
of 700,000,000 fully paid registered shares with a nominal value of USD 0.10 each. The issuance of fully paid registered
shares only occurs through the mandatory conversion of claims arising upon the occurrence of one or more trigger events
under financial market instruments with contingent conversion features issued by UBS AG. The creation of this conversion
capital was approved at the AGM held on 23 April 2024.
›
Refer to article 4b of the AoA for more information about the terms and conditions of the issue of shares out of existing
conversion capital – the AoA are available at
Capital band and reserve capital
As of the date of this report, UBS AG had not introduced any capital band or any reserve capital.
Shares
UBS AG has a single class of shares, which are registered shares in the form of uncertificated securities (in the sense of
the Swiss Code of Obligations) and intermediary-held securities (in the sense of the Swiss Federal Act on Intermediated
Securities). Each registered share has a nominal value of USD 0.10 and carries one vote. UBS AG imposes no limitation
on the rights to own its securities.
Dividend distributions
The decision to pay a dividend and the amount of any dividend depend on a variety of factors, including our profits, cash
flow generation and capital ratios.
For the 2025 financial year, the BoD is proposing at the 2026 AGM to the shareholder for approval an ordinary dividend
distribution of USD 4,500m, to be paid out shortly after the AGM, and the appropriation of USD 4,500m to a special
dividend reserve. The decision on the distribution of the special dividend is intended to be made at an EGM in the second
half of 2026, taking into account the ongoing discussion on Swiss regulatory capital requirements.
On 31 December 2025, UBS AG had 3,858,408,466 issued shares with a nominal value of USD 0.10 each, equating to
a share capital of USD 385,840,846.60. All shares carry voting rights, were fully paid in and eligible for dividends. There
are no preferential rights associated with these shares, and no other classes of shares have been issued by UBS AG.
Shareholders’ participation rights
Voting rights
The sole direct shareholder of UBS AG is UBS Group AG, which holds 100% of UBS AG shares. These shares are entitled
to voting rights without restriction.
Statutory quorums
Motions are decided at a general meeting by a majority of the votes represented, excluding blank and invalid ballots. For
the approval of certain specific issues, the Swiss Code of Obligations requires a positive vote from a two-thirds majority
of the votes represented at the given general meeting and from a majority of the nominal value of shares represented
thereat. Such issues include creating shares with privileged voting rights, introducing restrictions on the transferability of
registered shares, creating conditional capital or introducing a capital band or reserve capital and restricting or excluding
shareholders’ preemptive rights.
The AoA also require a two-thirds majority of votes represented for approval of any change to their provisions regarding
the number of BoD members, any decision to remove one-quarter or more of the BoD members and any modification to
the provision establishing this qualified quorum.
Convocation of general meetings of shareholders
The AGM must be held within six months of the close of the financial year (i.e. 31 December). In 2026, the AGM will
take place on 14 April.
Extraordinary general meetings (EGM) may be convened whenever the BoD or the auditors consider it necessary.
Shareholders individually or jointly representing at least 10% of the share capital may at any time, including during an
AGM, require, by way of a written statement, that an EGM be convened to address a specific issue they put forward.
Annual Report 2025 |
Corporate governance 110
Board of Directors
The BoD, led by the Chairman, consists of at least 5 and no more than 12 members, as per our AoA.
The BoD, led by the Chairman, decides on the strategy of UBS AG upon recommendation by the President of its Executive
Board (the EB) and exercises the ultimate supervision of management. Its ultimate responsibility for the success of UBS AG
is exercised subject to the parameters set by the Group.
Members of the Board of Directors
Non-executive
members of the
Board
Position
Initial
election
Step
down
UBS business address
Colm Kelleher
Chairman of the BoD
5.4.2022
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Lukas Gähwiler
Vice Chairman /
member of the Risk Committee
5.4.2022
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Jeremy Anderson
Chairperson of Audit Committee
26.4.2018
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Claudia Böckstiegel
Member of the BoD
7.4.2021
Bahnhofstrasse 45, 8001 Zurich, Switzerland
William C. Dudley
Member of the Risk Committee
18.4.2019
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Patrick Firmenich
Member of the Audit Committee
7.4.2021
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Fred Hu
Member of the Compensation Committee
(until 10.4.2025)
26.4.2018
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Mark Hughes
Chairperson of the Risk Committee
27.4.2020
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Renata Jungo
Brüngger
Member of the BoD
8.4.2025
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Gail Kelly
Member of the Compensation Committee
(as of 10.4.2025)
23.4.2024
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Nathalie Rachou
Member of the Risk Committee (until
8.4.2025)
27.4.2020
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Julie G. Richardson
Chairperson of the Compensation
Committee / member of the Risk Committee
27.4.2017
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Lila Tretikov
Member of the Audit Committee
(as of 10.4.2025)
8.4.2025
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Jeanette Wong
Member of the Audit Committee /
member of the Compensation Committee
18.4.2019
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Agustín Carstens
Candidate to the UBS AG Board
Proposed
for election
at the 2026
AGM
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Luca Maestri
Candidate to the UBS AG Board
Proposed
for election
at the 2026
AGM
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Markus Ronner
Candidate to the UBS AG Board
Proposed
for election
at the 2026
AGM
Bahnhofstrasse 45, 8001 Zurich, Switzerland
No current BoD member has either an employment contract or a significant business connection to UBS or any of its
subsidiaries. No member of the BoD currently carries out operational management tasks within the Group. Except for the
new Vice Chairman standing to be elected at the 2026 AGM, Markus Ronner, who was Group Chief Compliance und
Governance Officer of UBS Group AG until the 2026 AGM, no BoD member has carried out operational management
tasks within the Group over the past three years. All members of the BoD are also members of UBS Group AG’s Board of
Directors, and committee membership is the same for both entities for the committees they have in common.
In 2025, the BoD had three permanent committees: the Audit Committee, the Compensation Committee and the Risk
Committee.
The following biographies provide information about the BoD members who were in office after the 2025 AGM.
Annual Report 2025 |
Corporate governance 111
Colm Kelleher
Chairman of the Board of Directors, independent and non-
executive member of the Board since 2022
Nationality:
Year of birth:
Colm Kelleher was elected Chairman of UBS in April 2022. In March 2023,
he led the successful negotiations for UBS to acquire the Credit Suisse
Group. He served as President of Morgan Stanley until retiring from that
firm in 2019, overseeing both the Institutional Securities Business and
Wealth Management. Before that, he was Co-President and then
President of Morgan Stanley Institutional Securities. During the global
financial crisis, he held the position of CFO and Co-Head Corporate
Strategy from 2007 to 2009. Mr. Kelleher is a well-respected leader in the
financial services sector. His 30-year career with Morgan Stanley attests to
his solid leadership experience in banking and excellent relationships
around the world. He has a deep understanding of the global banking
landscape and broad banking experience across all the geographical
regions and major business areas in which UBS operates.
Professional experience
2016 – 2019
President, Morgan Stanley, responsible for Institutional
Securities and Wealth Management
2011 – 2016
CEO of Morgan Stanley International, Morgan Stanley
2013 – 2015
President, Institutional Securities, Morgan Stanley
2010 – 2012
Co-President, Institutional Securities, Morgan Stanley
2007 – 2009
CFO and Co-Head Corporate Strategy, Morgan Stanley
2006 – 2007
Head Global Capital Markets, Morgan Stanley
2004 – 2006
Co-Head Fixed Income, Europe, Morgan Stanley
1989 – 2004
Various roles, Morgan Stanley
Education
–
Master’s degree, modern history, the University of Oxford
–
Fellow of the Institute of Chartered Accountants in England and
Wales
Other activities and functions
–
Chairman of the Board of Directors of UBS Group AG
–
Member of the Board of Directors of the Bretton Woods Committee
–
Member of the Board of the Swiss Finance Council
–
Member of the Board of the International Monetary Conference
–
Member of the Board of the Bank Policy Institute
–
Member of the Board of Americans for Oxford
–
Visiting Professor of Banking and Finance, Loughborough Business
School
–
Member of the European Financial Services Round Table
–
Member of the European Banking Group
–
Member of the International Advisory Council of the China Securities
Regulatory Commission
–
Member of the Chief Executive’s Advisory Council (Hong Kong)
Annual Report 2025 |
Corporate governance 112
Lukas Gähwiler
Vice Chairman, non-independent and non-executive
member of the Board since 2022
–
Member of the Risk Committee of UBS Group AG and UBS AG
since 2023
Nationality:
Year of birth:
Lukas Gähwiler brings a wealth of industry experience and an in-depth
understanding of UBS to the Board of Directors of UBS. He served as
Chairman of the Board of UBS Switzerland AG for five years and was
previously a member of the Group Executive Board of UBS and President
UBS Switzerland, responsible for the private clients, wealth management,
corporate and institutional clients, investment banking, and asset
management businesses in UBS’s home market. Before joining UBS, Mr.
Gähwiler worked for Credit Suisse for over twenty years, his last role being
Chief Credit Officer, Global Private and Corporate Banking. In addition to
his leadership and industry experience across all parts of the banking
business, his strong connections and network, particularly in Switzerland,
are instrumental for the firm. After the acquisition of the Credit Suisse Group
in 2023, Mr. Gähwiler served as Chairman of Credit Suisse AG.
Professional experience
2023 – 2024
Chairman of the Board of Directors of Credit Suisse AG
2017 – 2022
Chairman of the Board of Directors of UBS Switzerland AG
2010 – 2016
Member of the Group Executive Board,
UBS and President UBS Switzerland
2003 – 2010
Chief Credit Officer, Global Private and Corporate
Banking, Credit Suisse
2002 – 2003
Head Credit Risk Management, Corporate Clients
Switzerland, Credit Suisse
1998 – 2001
Chief of Staff to CEO, Private and Corporate Clients,
Credit Suisse
1990 – 1998
Various senior front office roles in Corporate Clients in
Switzerland and North America, Credit Suisse
1981 – 1986
Client Advisor Retail and Wealth Management,
St.Galler Kantonalbank
Education
–
Advanced Management Program, Harvard Business School
–
MBA program, International Bankers School, New York
–
Bachelor’s degree, business administration, University of Applied
Sciences, St. Gallen
Non-listed company boards
–
Vice Chairman of the Board of Directors of Pilatus Aircraft Ltd
–
Member of the Board of Directors of Ringier AG
Other activities and functions
–
Vice Chairman of the Board of Directors of UBS Group AG
–
Member of the Board and Board Committee of economiesuisse
–
Chairman of the Employers Association of Banks in Switzerland
–
Member of the Board of Directors of the Swiss Employers Association
–
Member of the Board of Directors and the Board of Directors
Committee of the Swiss Bankers Association
–
Member of the Board of the Swiss Finance Council
–
Member of the Board of Trustees of Avenir Suisse
Jeremy Anderson
Independent and non-executive member of the Board since
2018
–
Chairperson of the Audit Committee of UBS Group AG and UBS AG
since 2018
Nationality:
Year of birth:
Jeremy Anderson is a financial services veteran, with more than 30 years’
experience working in the banking and insurance sector in an advisory
capacity, covering a broad range of topics, including strategy, audit and
risk management, technology-enabled transformation, mergers, and bank
restructuring. Before retiring from KPMG in 2017, he was its Chairman of
Global Financial Services. Mr. Anderson is also an IT expert, having started
out as a software developer in the early 1980s, before working in IT
consulting and developing a broad knowledge of systems integration and
IT outsourcing services, as well as software development. He cemented his
reputation as a tech specialist by becoming a founding sponsor of KPMG’s
Global Fintech Network in 2014.
Professional experience
2010 – 2017
Chairman of Global Financial Services, KPMG International
2008 – 2011
Head of Clients and Markets KPMG Europe, KPMG
International
2006 – 2011
Head of Financial Services KPMG Europe, KPMG
International
2004 – 2006
Head of Financial Services KPMG UK, KPMG International
2002 – 2004
Member of the Group Management Board and Head of
UK operations, Atos Origin SA
1985 – 2002
KPMG consulting UK, KPMG
1980 – 1985
Software developer, Triad Computing Systems
Education
–
Bachelor’s degree, economics, University College London
Listed company boards
–
Member of the Board of Prudential plc (chair of the risk committee)
Non-listed company boards
–
Chairman of Lamb’s Passage Holding Ltd
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Member of the Board of Credit Suisse International
–
Trustee of the UK’s Productivity Leadership Group
Annual Report 2025 |
Corporate governance 113
William C. Dudley
Independent and non-executive member of the Board since 2019
–
Member of the Risk Committee of UBS Group AG and UBS AG
since 2019
Nationality:
Year of birth:
William C. Dudley served as the President and CEO of the Federal Reserve
Bank of New York for nine years. He demonstrated exceptional leadership
in monetary policy and as a top regulator, including during the years of
the global financial crisis. During that period, his additional area of focus
included cultural behavior and social and governance topics in the
financial services industry. He also served as the Vice Chairman and a
permanent member of the Federal Open Market Committee. Mr. Dudley
brings a wealth of experience in banking and research thanks to his former
management positions at Goldman Sachs Group and Morgan Guaranty
Trust.
Professional experience
2009 – 2018
President and CEO, the Federal Reserve Bank of New York
2007 – 2009
Executive Vice President and Head Markets Group,
the Federal Reserve Bank of New York
2006
Senior advisor (part-time), Goldman Sachs Group
2002 – 2005
Partner and Director US Economic Research Group,
Goldman Sachs Group
1996 – 2002
Managing Director and Director US Economic Research
Group, Goldman Sachs Group
1983 – 1996
Economist at Goldman Sachs Group, Morgan Guaranty
Trust Company, and Board of Governors of the Federal
Reserve System
Education
–
Bachelor of Arts, New College of Florida
–
Doctorate, economics, University of California, Berkeley
Listed company boards
–
Member of the Global Advisory Council of Coinbase
Non-listed company boards
–
Member of the Advisory Board of Suade Labs
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Senior Advisor to the Griswold Center for Economic Policy Studies,
Princeton University
–
Member of the Group of Thirty
–
Member of the Council on Foreign Relations
–
Chairman of the Bretton Woods Committee Board of Directors
–
Member of the Board of the Council for Economic Education
Patrick Firmenich
Independent and non-executive member of the Board since 2021
–
Member of the Audit Committee of UBS Group AG and UBS AG
since 2021
Nationality:
Year of birth:
Patrick Firmenich was Chairman of the Board of Firmenich International
SA, a privately owned fragrances and flavorings company, from 2016 to
2023 and its CEO for 12 years. In 2023, he became Vice Chairman of
dsm–firmenich, a listed company. He has demonstrated his
entrepreneurial leadership by significantly advancing the Firmenich
group’s global position through organic and in-organic growth and
succeeded in transforming the organization to continuously respond to
client needs and the market environment. He developed an ambitious
sustainability strategy for the group to lead the industry in health, safety
and environmental performance. Before joining Firmenich, he held several
positions in the legal and banking sectors, including working as an
international investment banking analyst.
Professional experience
2016 – 2023
Chairman of the Board of Firmenich International SA,
Geneva
2014 – 2016
Vice Chairman of the Board, Firmenich International SA,
Geneva
2002 – 2014
CEO, Firmenich SA, Geneva
2001 – 2002
Corporate Vice President, Special Operations,
Firmenich SA, Geneva
1997 – 2001
Vice President Fine Fragrance worldwide and
Président Directeur Général, Firmenich & Cie, Paris,
and Firmenich Inc, New York
1993 – 1997
Vice President Fine Fragrance North America,
Firmenich Inc, New York
1990 – 1993
Account Manager, Firmenich & Cie, Paris
1988 – 1989
Analyst, International Investment Banking, Credit Suisse
First Boston
1988
Production administrator, Firmenich SA de CV, Mexico
1984 – 1986
Attorney, Business Law, Patry, Junet, Simon & Le Fort,
Geneva
Education
–
Master’s degree, law, University of Geneva, admitted to the bar
in Geneva
–
MBA, INSEAD Fontainebleau
Listed company boards
–
Vice Chairman of the Board of dsm–firmenich (chair of the
governance and nomination committee)
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Member of the Advisory Council of the Swiss Board Institute
Annual Report 2025 |
Corporate governance 114
Fred Hu
Independent and non-executive member of the Board since 2018
Nationality:
Year of birth:
Fred Hu has been the Chairman and CEO of Primavera Capital Group, an
Asia-based private investment firm focused on emerging technology and
innovative industries, since founding it in 2010. In that role he oversees
the overall strategy, talent development, and culture and assumes the
primary responsibilities for establishing and maintaining the long-term
partnerships with global investors. Prior to that, he was a Partner and
Chairman for Greater China at Goldman Sachs. Mr. Hu has a profound
understanding of China’s economy and rapidly developing financial
system, and a vast amount of experience in founding, advising and
investing in leading firms in the tech, consumer and health-care sectors in
China and globally. He has worked at the IMF and advised the Chinese
government on economic policy.
Professional experience
2010 – date
Founder, Chairman and CEO, Primavera Capital Group,
China
2008 – 2010
Partner and Chairman of Greater China, Goldman Sachs
2004 – 2008
Partner and Co-Head, Investment Banking, China,
Goldman Sachs
Education
–
Master’s degree, engineering science, Tsinghua University
–
Master’s degree and doctorate, economics, Harvard University
Listed company boards
–
Non-executive Chairman of the Board of Yum China Holdings (chair of
the nomination and governance committee)
–
Member of the Board of Chubb Limited
Non-listed company boards
–
Chairman of Primavera Capital Ltd
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Trustee of the China Medical Board
–
Member of the Global Board of The Nature Conservancy and Co-
Chairman of its Asia Pacific Council
–
Member of the Board of Trustees, the Institute for Advanced Study
Mark Hughes
Independent and non-executive member of the Board since 2020
–
Chairperson of the Risk Committee of UBS Group AG and UBS AG
since 2020
Nationality:
Year of birth:
Mark Hughes is a highly experienced professional in the financial services
sector, having spent more than 35 years working for RBC (the Royal Bank
of Canada) in Canada, the US and the UK. In his final role as Group Chief
Risk Officer of RBC, he was responsible for the strategic management of
risk on an enterprise-wide basis and oversaw all risk functions. During his
career, Mr. Hughes has also held senior management positions in the front
office and key operational roles. Currently, he is a frequent lecturer at the
University of Leeds and the University of Manchester (both in England)
and is Director Emeritus of the Global Risk Institute, bringing an enormous
amount of experience as a risk specialist to the Board of Directors of UBS.
Professional experience
2014 – 2018
Group Chief Risk Officer and member
Group Executive Committee, RBC
2013
Deputy Chief Risk Officer, RBC
2008 – 2013
COO, RBC Capital Markets, RBC
2001 – 2008
Head of Global Credit, RBC
1999 – 2001
Head of Debt Products, RBC
1998 – 1999
Senior Vice President and General Manager USA, RBC
1997 – 1998
Senior Vice President Financial Services, RBC
1982 – 1996
Various positions, RBC
Education
–
Bachelor of Laws (LL.B.), University of Leeds
–
MBA, finance, University of Manchester
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Senior advisor to McKinsey & Company
Annual Report 2025 |
Corporate governance 115
Renata Jungo Brüngger
Independent and non-executive member of the Board since 2025
Nationality:
Year of birth:
Renata Jungo Brüngger is a highly respected professional with extensive
experience in legal affairs, governance, integrity and sustainability. She
was a member of the Board of Management of Daimler AG (now
Mercedes-Benz Group AG) from 2016 to October 2025. Her
responsibilities include the areas of integrity, governance and sustainability
throughout the Mercedes-Benz Group AG, its group’s legal department
and the compliance, legal product and technology organization, as well
as corporate data protection and corporate audit. She was also
responsible for overseeing the implementation of integrity and
sustainability management across the company. Ms. Jungo Brüngger
joined the former Daimler AG as Head of Legal and Executive Vice
President in 2011. Previously, she was General Counsel for Corporate
EMEA and Vice President / General Counsel for Emerson Process
Management EMEA, Emerson Electric (Switzerland and the US) and before
that worked for the legal department of Metro Holding AG and the Swiss
law firm Bär & Karrer.
Professional experience
2019 –
October 2025
Member of the Board of Management for Integrity,
Governance & Sustainability, Mercedes Benz Group AG
(formerly Daimler AG) and Mercedes Benz AG
2016 – 2019
Member of the Board of Management for Integrity & Legal
Affairs, Daimler AG
2011 – 2015
Head of Legal and Executive Vice President, Daimler AG
2000 – 2011
General Counsel Corporate EMEA & Vice
President / General Counsel Emerson Process Management
EMEA, Emerson Electric
1995 – 2000
Corporate Legal Counsel, Divisional Director, Metro
Holding AG
1994
Secondment, Sidley & Austin
1990 – 1994
Lawyer (associate), Bär & Karrer
Education
–
Masters of Laws (LL.M.) in international commercial law, University
of Zurich
–
Admission to the bar
–
Licentiate (bilingual German / French) in Law (Lic. iur.), University
of Fribourg
Listed company boards
–
Member of the Supervisory Board of Daimler Truck Holding AG
–
Member of the Supervisory Board of Daimler Truck AG
–
Member of the Supervisory Board of Munich Re (chair of
remuneration committee)
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Member of the Board of Trustees of Internationale Bachakademie
Stuttgart
–
Member of the Board of Trustees of Gesellschaft der Freunde von
Bayreuth e. V. (Friends of Bayreuth)
Gail Kelly
Independent and non-executive member of the Board since 2024
–
Member of the Compensation Committee of UBS Group AG and UBS
AG since 2025
Nationality:
Year of birth:
Gail Kelly brings to the board more than 35 years of executive financial
services experience in South Africa and Australia. She served as the Group
CEO and Managing Director for two banks in Australia: St. George Bank,
from 2002 to 2007, followed by Westpac Banking Corporation, from
2008 to 2015. During her tenure as CEO, Ms. Kelly navigated Westpac
through the challenges of the global financial crisis in 2008 and 2009 and
the successful merger with St. George Bank in 2008, the largest in-market
financial services merger in Australia. Westpac’s market capitalization
more than doubled over her tenure as CEO. After her executive career,
Ms. Kelly continues to hold a portfolio of roles, leveraging her experience
and insights as a global leader. She was a Senior Global Advisor for UBS
from 2016 to 2023.
Professional experience
2008 – 2015
Group CEO and Managing Director,
Westpac Banking Corporation
2002 – 2007
Group CEO and Managing Director, St. George Bank
1999 – 2001
Group Executive, Customer Service Division,
Commonwealth Bank of Australia
1997 – 1999
Group Manager, Strategic Marketing, Commonwealth
Bank of Australia
1990 – 1997
Various General Manager positions, Nedbank Group,
South Africa
Education
–
Bachelor of Arts, the University of Cape Town
–
MBA, University of Witwatersrand, Johannesburg
Listed company boards
–
Member of the Board of Singtel Communications (chair of the
executive resource and compensation committee)
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Member of the Group of Thirty
–
Member of the Board of Directors of the Bretton Woods Committee
–
Member of the Australian American Leadership Dialogue Advisory
Board
–
Senior advisor to McKinsey & Company
Annual Report 2025 |
Corporate governance 116
Julie G. Richardson
Independent and non-executive member of the Board since 2017
–
Chairperson of the Compensation Committee of UBS Group AG and
UBS AG since 2019
–
Member of the Risk Committee of UBS Group AG and UBS AG since
2017
Nationality:
Year of birth:
Julie G. Richardson spent more than 25 years on Wall Street as a senior
investment banker and private equity investor, with a focus on telecom,
media and technology. She began her career at Merrill Lynch, before
moving to JPMorgan Chase, where she headed the telecommunications,
media and technology investment banking group. Later, she moved into
private equity, as head, and subsequently senior advisor, of the New York
office of Providence Equity Partners, where she spearheaded many
important investments and buyouts. Throughout her career, Ms.
Richardson has spent substantial amounts of time with both incumbent
and new technology companies, acting as an independent board member
of a digital knowledge management company, a leading cloud monitoring
firm and a cyber insurance company.
Professional experience
2012 – 2014
Senior advisor, Providence Equity Partners, New York
2003 – 2012
Partner and Head of the New York office,
Providence Equity Partners, New York
1998 – 2003
Vice Chairman of the Investment Banking division of
JPMorgan Chase & Co. and Head of its Global
Telecommunications, Media and Technology group
1986 – 1998
Various positions at Merrill Lynch, final position: Managing
Director Media and Communications Investment Banking
Education
–
Bachelor’s degree, business administration, University of
Wisconsin–Madison
Listed company boards
–
Member of the Board of BXP
–
Member of the Board of Datadog (chair of the audit committee)
Non-listed company boards
–
Member of the Board of Fivetran
–
Member of the Board of Coalition, Inc.
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
Lila Tretikov
Independent and non-executive member of the Board since 2025
–
Member of the Audit Committee of UBS Group AG and UBS AG since
2025
Nationality:
Year of birth:
Lila Tretikov is widely recognized as a leading authority on artificial
intelligence (AI) and technology-driven business transformation. She
currently serves as a Partner at New Enterprise Associates, Inc. (NEA), a
prominent Silicon Valley venture capital firm, where she leads AI strategy.
From 2018 to 2024, Ms. Tretikov held senior executive roles at Microsoft
Corporation, culminating in her position as Deputy Chief Technology
Officer, overseeing major AI initiatives that drove significant strategic
transformation. Prior to that, she served as Senior Vice President and
CEO & Vice Chair Terrawatt at Engie SA, a global energy company
headquartered in France. Earlier in her career, Ms. Tretikov was CEO of
the Wikimedia Foundation & Wikipedia Endowment, where she pioneered
Wikipedia’s AI strategy. A distinguished software engineer and
programmer, she continues to shape the landscape of AI adoption,
innovation and policy worldwide.
Professional experience
2024 – date
Partner and Head of Artificial Intelligence Strategy, New
Enterprise Associates, Inc.
2020 – 2024
Corporate Vice President and Deputy Chief Technology
Officer, Microsoft Corporation
2018 – 2020
Corporate Vice President, Artificial Intelligence, Perception
and Mixed Reality, Microsoft Corporation
2016 – 2018
Senior Vice President and CEO & Vice Chair
Terrawatt, Engie SA / Terrawatt initiative
2014 – 2016
CEO, Wikimedia Foundation & Wikipedia Endowment
2007 – 2014
Chief Product Officer and Chief Officer of product,
marketing, cloud infrastructure, IT, support and services,
SugarCRM
2005 – 2007
General Manager, mobile and software, Evolving Systems
2004 – 2005
General Manager, risk & compliance, SOX digital, Bank of
America Corporation
1993 – 2004
Various technical roles, early career
Education
–
Computer science (specializing in AI) and visual art, the University of
California, Berkeley
–
Post-graduate-level studies at the University of Oxford Saïd Business
School and University of Stanford Directors’ College
Listed company boards
–
Member of the Board of Capgemini SE
–
Member of the Board of Volvo Car Corporation
–
Member of the Board of Xylem Inc.
Non-listed company boards
–
Member of the Board of Zendesk Inc.
–
Member of the Board of Backflip AI, Inc.
–
Member of the Board of Cusp AI Limited
–
Member of the Board of Horizon 3 AI, Inc.
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
Annual Report 2025 |
Corporate governance 117
Jeanette Wong
Independent and non-executive member of the Board since 2019
–
Member of the Audit Committee of UBS Group AG and UBS AG since
2019
–
Member of the Compensation Committee of UBS Group AG and UBS
AG since 2020
Nationality:
Year of birth:
Jeanette Wong has more than 30 years of operational experience in the
financial sector in Singapore. She retired from DBS Group in 2019, where
she was Group Executive responsible for the institutional banking
business, a post that encompassed corporate banking, global transaction
services, strategic advisory, and mergers and acquisitions. She has also
held the positions of Director of DBS Bank (China) Limited, Chairperson of
DBS Bank (Taiwan) Ltd and CFO of DBS Group. During a 16-year career
with JPMorgan, Ms. Wong helped build up its Asia FX, fixed income and
emerging markets business. She brings extensive experience from serving
as a member of the board of directors of two high-value listed companies.
Professional experience
2008 – 2019
Group Executive institutional banking business, DBS Bank,
Singapore
2003 – 2008
CFO, DBS Bank, Singapore
2003
Chief Administration Officer, DBS Bank, Singapore
1997 – 2002
Country Manager Singapore, JPMorgan, Singapore
1986 – 1997
Various roles in Global Markets and Emerging Markets
Sales and Trading business, Asia, JPMorgan, Singapore
1984 – 1986
Manager, Private Banking, Citibank, Singapore
1982 – 1984
Manager, Corporate Banking, Paribas, Singapore
Education
–
Bachelor’s degree, business administration, the National University
of Singapore
–
MBA, University of Chicago
Listed company boards
–
Member of the Board of Prudential plc (chair of the audit committee)
–
Member of the Board of Singapore Airlines Limited (chair of the board
compensation and industrial relations committee)
Non-listed company boards
–
Member of the Board of GIC Pte Ltd
–
Member of the Board of PSA International
Other activities and functions
–
Member of the Board of Directors of UBS Group AG
–
Chairman of the CareShield Life Council
–
Member of the Securities Industry Council
–
Member of the Board of Trustees of the National University
of Singapore
Annual Report 2025 |
Corporate governance 118
Elections and terms of office
UBS AG’s sole shareholder, UBS Group AG, annually elects each member of the BoD individually.
Organizational principles and structure
Following each AGM, the BoD meets to appoint one or more Vice Chairmen, the BoD committee members and the
respective committee Chairpersons. At the same meeting, the BoD appoints the Company Secretary, who, pursuant to
the Organization Regulations, acts as secretary to the BoD and its committees.
Pursuant to the AoA and the Organization Regulations, the BoD meets as often as business requires, but it must meet at
least six times a year. In 2025, the BoD met 38 times jointly with the Board of Directors of UBS Group AG and four times
in standalone UBS AG meetings.
BoD committees
The committees listed below assist the BoD in fulfilling its responsibilities. Each committee meets as often as its business
requires, but at least four times a year for the Audit Committee, the Compensation Committee and the Risk Committee.
Audit Committee
Throughout 2025, the Audit Committee consisted of four independent BoD members. Jeremy Anderson (Chairperson),
Patrick Firmenich Nathalie Rachou and Jeanette Wong. After the 2025 AGM, Lila Tretikov joined the committee when
Nathalie Rachou stepped down from the BoD. All Audit Committee members have accounting or related financial
management expertise and, in compliance with the rules established pursuant to the 2002 US Sarbanes–Oxley Act, at
least one member qualifies as a financial expert. The NYSE standards on corporate governance and Rule 10A-3 under
the US Securities Exchange Act set more stringent independence requirements for members of audit committees than
for the other members of the BoD. Throughout 2025, all members of the Audit Committee satisfied these requirements,
in that they did not receive, directly or indirectly, any consulting, advisory or compensatory fees from any member of the
Group other than in their capacity as a BoD member, did not hold, directly or indirectly, UBS AG shares in excess of 5%
of the outstanding capital and did not serve on the audit committees of more than two other public companies. The
function of the Audit Committee is to support the Board in fulfilling its oversight duty relating to financial reporting and
internal controls over financial reporting, the effectiveness of the external and internal audit functions and whistleblowing
procedures. Management is responsible for the preparation, presentation and integrity of the financial statements, while
the external auditors are responsible for auditing financial statements. The Audit Committee’s responsibility is one of
oversight and review.
Compensation Committee
Throughout 2025, the Compensation Committee consisted of three BoD members. Julie G. Richardson (Chairperson)
Fred Hu and Jeanette Wong, at the 2025 AGM, Gail Kelly was elected to the committee replacing Fred Hu, who stepped
down from this committee. The function of the Compensation Committee is to support the Board in its duties to set
guidelines on compensation and benefits, to oversee implementation thereof, to approve certain compensation and to
scrutinize executive performance.
Risk Committee
In 2025, the Risk Committee consisted of three independent BoD members, Mark Hughes (Chairperson), William C.
Dudley and Julie G. Richardson, as well as the Vice Chairman of the BoD, Lukas Gähwiler. The function of the Risk
Committee is to oversee and support the Board in fulfilling its duty to set and supervise an appropriate risk management
and control framework in the areas of:
(i) financial and non-financial risks; and
(ii) balance sheet, treasury and capital management, including funding, liquidity and equity attribution.
Cybersecurity governance
Cybersecurity, as one of the inherently highest and most rapidly evolving non-financial risks, is a key focus for the BoD.
It is primarily covered at the joint meetings between the Risk Committee and the Audit Committee with the Quarterly
Cyber Risk Updates. These quarterly updates, combined with dedicated deep dives for the full BoD, provide the BoD with
assessments of the firm’s cyber-risk posture, cyber-attack surfaces and vectors and security measures, cyber maturity, and
associated improvement measures, as well as updates on the cybersecurity threat environment and lessons learned from
cybersecurity incidents across the globe and industries. Cyber risk is also covered in the quarterly Group Technology Risk
Taxonomies Report discussed at the Risk Committee.
›
Refer to “Non-financial risk” in the “Risk management and control” section of this report for information about cybersecurity
Important business connections of independent members of the Board of Directors
As a global financial services provider and a major Swiss bank, we enter into business relationships with many large
companies, including some in which BoD members have management or independent board responsibilities.
Our Organization Regulations require one-third of the members of the BoD to be independent. For this purpose,
independence is determined in accordance with FINMA Circular 2017/1 “Corporate governance – banks”.
In 2025, our BoD met the standards of the Organization Regulations for the percentage of directors who are considered
independent under the criteria described above.
Annual Report 2025 |
Corporate governance 119
All relationships and transactions with UBS AG’s independent BoD members are conducted in the ordinary course of
business and are on the same terms as those prevailing at the time for comparable transactions with non-affiliated
persons. All relationships and transactions with BoD members’ associated companies are conducted at arm’s length.
Checks and balances: Board of Directors and Executive Board
We operate under a strict dual board structure, as mandated by Swiss banking law. The separation of responsibilities
between the BoD and the Executive Board (the EB) is clearly defined in the Organization Regulations. The BoD decides
on the strategy of UBS AG, upon recommendations by the President of the EB, and exercises ultimate supervision over
management; whereas the EB, headed by the President of the EB, has executive management responsibility. The functions
of Chairman and President of the EB are assigned to two different persons, leading to a separation of powers. This
structure establishes checks and balances and preserves the institutional independence of the BoD from the executive
management of UBS AG, for which responsibility is delegated to the EB. No member of one board may simultaneously
be a member of the other.
Supervision and control of the EB remain with the BoD. The authorities and responsibilities of the two bodies are governed
by the AoA and the Organization Regulations.
Although the recruiting process for BoD and EB members takes into account a broad spectrum of factors, such as skills,
backgrounds, experience and expertise, our approach with regard to diversity considerations does not constitute a
diversity policy within the meaning of the EU Directive on Non-Financial Reporting, and Swiss law does not require UBS
to maintain such a policy.
Annual Report 2025 |
Corporate governance 120
Executive Board
The BoD delegates the management of the business to the EB.
Responsibilities, authorities and organizational principles of the Executive Board
At UBS AG, management of the business is also delegated, and its EB, under the leadership of the President of the EB,
has executive management responsibility for UBS AG and its business. All members of the EB are members of the GEB.
Sabine Keller-Busse, who serves as President UBS Switzerland AG, is not a member of the EB. In 2025, the EB held 27
combined meetings with the GEB and four UBS AG standalone meetings.
UBS AG EB has two permanent committees: the Asset and Liability Committee (the ALCO) and the Finance and Risk
Committee (the FRC).
The ALCO is responsible for managing UBS AG’s assets and liabilities in line with the UBS AG and Group strategy and
regulatory requirements. In 2025, the ALCO held 12 meetings.
The FRC is responsible for supervising and controlling UBS AG’s business, financial and risk profile of the overall UBS AG
standalone, as well as the entity’s business activities in Switzerland and cross-jurisdictional branch-related matters, in line
with the UBS AG and Group strategy and regulatory requirements. The FRC is also responsible for ensuring the financial
and risk profile of UBS AG standalone complies with the agreed risk appetite, by ascertaining that appropriate and timely
actions are taken. In 2025, the FRC held four meetings.
Executive Board
Position
Initial
appointment
to the EB
Step-down
date
UBS business address
Sergio P. Ermotti
President of the Executive Board
(also from 2011 to 2020)
2023
Bahnhofstrasse 45, 8001 Zurich, Switzerland
George
Athanasopoulos
Co-President Investment Bank
2024
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Michelle Bereaux
Integration Officer
2023
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Michael Dargan
Chief Operations and Technology Officer
2021
31.12.2025
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aleksandar Ivanovic
President Asset Management
2024
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Robert Karofsky
Co-President Global Wealth Management
and President UBS Americas
2018
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Iqbal Khan
Co-President Global Wealth Management
and President UBS Asia Pacific
2019
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Barbara Levi
General Counsel
2021
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Beatriz Martin
Jimenez
Head Non-core and Legacy and
President UBS Europe, Middle East and
Africa
2023
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Markus Ronner
Chief Compliance and Governance Officer
2018
31.12.2025
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Stefan Seiler
Head Human Resources & Corporate
Services
2023
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Todd Tuckner
Chief Financial Officer
2023
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Marco Valla
Co-President Investment Bank
2024
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Damian Vogel
Chief Risk Officer
2024
Bahnhofstrasse 45, 8001 Zurich, Switzerland
The following biographies provide information about the EB members in office on 31 December 2025.
Annual Report 2025 |
Corporate governance 121
Sergio P. Ermotti
President of the Executive Board,
member of the EB
from 2011 to 2020 and since 2023
Nationality:
Year of birth:
Sergio P. Ermotti has been Group CEO of UBS Group AG and President of
the Executive Board of UBS AG since 2023. He was also the Group CEO
from 2011 to 2020. He re-joined UBS from Swiss Re, where he was
Chairman of the Board of Directors until 2023. Prior to joining UBS in
2011, he was at UniCredit Group, where from 2007 to 2010 he served as
Group Deputy CEO and Head of Corporate & Investment Banking and
Private Banking, prior to which he served as Head of the Markets &
Investment Banking Division. Before that, he held various positions at
Merrill Lynch & Co. in the areas of equity derivatives and capital markets.
He became Co-Head of Global Equity Markets and a member of the
Executive Management Committee for Global Markets & Investment
Banking in 2001.
Professional experience
2023 – date
Group CEO, UBS Group AG, and
President of
the Executive Board,
UBS AG
2021 – 2023
Chairman of the Board of Directors, Swiss Re
2020 – 2021
Member of the Board of Directors, Swiss Re
2011 – 2020
Group CEO, UBS
2011
Chairman and CEO UBS Group Europe, Middle East and
Africa, and member of the Group Executive Board, UBS
2007 – 2010
Group Deputy CEO and Head Corporate & Investment
Banking and Private Banking, UniCredit
2005 – 2007
Head Markets & Investment Banking Division, UniCredit
1987 – 2004
Various senior management positions, Merrill Lynch & Co
Education
–
Swiss-certified banking expert
–
Advanced Management Programme, the University of Oxford
Listed company boards
–
Member of the Board of Ermenegildo Zegna N.V. (Lead Non-Executive
Director)
Non-listed company boards
–
Member of the Board of Società Editrice del Corriere del Ticino SA
Other activities and functions
–
Group CEO of
UBS
Group
–
Member of the Board of Innosuisse, the Swiss Innovation Agency
–
Member of Institut International d’Etudes Bancaires
–
Member of the WEF International Business Council and Governor of
the Financial Services / Banking Community
–
Member of the MAS International Advisory Panel
–
Member of the Board of the Institute of International Finance
–
Member of the Board of the Swiss-American Chamber of Commerce
Annual Report 2025 |
Corporate governance 122
George Athanasopoulos
Co-President Investment Bank,
member of the EB since 2024
Nationality:
Year of birth:
George Athanasopoulos became Co-President of the Investment Bank in
2024. He jointly manages the Investment Bank with Marco Valla across all
regions to ensure an unparalleled global offering for our client franchise.
Since joining UBS in 2010, Mr. Athanasopoulos has held various senior
roles, including Co-Head of Global Markets from 2020 to 2024 and Head
of Global Family and Institutional Wealth from 2022 to 2024. Before
joining UBS in 2010, he was General Manager at Eurobank EFG and
previously worked for Barclays Capital, most recently responsible for
Global Foreign Exchange and Global Emerging Markets Distribution. He
started his career in 1992, working in Europe and Asia for NatWest
Markets and Merrill Lynch.
Professional experience
2024 – date
Co-President of the Investment Bank,
UBS Group AG and UBS AG
2022 – 2024
Head Global Family and Institutional Wealth, UBS
2020 – 2024
Co-Head of Global Markets, UBS
2016 – 2019
Global Head of Foreign Exchange, Rates and Credit and
Head of Non-Core, UBS
2013 – 2016
Global Co-Head of Foreign Exchange,
Rates and Credit, UBS
2011 – 2013
Co-Head of Global Foreign Exchange and
Precious Metals, UBS
2010 – 2011
Head of Global Foreign Exchange Distribution, UBS
2009 – 2010
General Manager, Group Head of Trading, Sales and
Structuring, Eurobank EFG
2008 – 2009
Global Head of Foreign Exchange and Emerging
Markets Distribution, Barclays Capital
2004 – 2008
Various management positions in FX Markets,
Barclays Capital
Education
–
Master’s degree, shipping, trade and finance, Bayes Business School
–
Diploma in mechanical engineering, the National Technical University
of Athens
Other activities and functions
–
Member of the Group Executive Board of
UBS
Michelle Bereaux
Integration Officer until December 2025, Chief Compliance and
Operational Risk Control Officer since January 2026, member of
the EB since 2023
Nationality:
Year of birth:
Michelle Bereaux was appointed Group Chief Compliance and
Operational Risk Control Officer in January 2026. In this role, she is
responsible for developing UBS’s risk management and control framework
for non-financial risks and implementing the independent control
framework for these non-financial risks. Ms. Bereaux has been at UBS for
more than 25 years and has held various leadership roles across the firm.
She has been a member of the GEB since 2023 and acted as Group
Integration Officer from 2023 to 2025 to integrate Credit Suisse into UBS.
Previously, she served as both COO and UK Country Head of Asset
Management and, prior to that, as COO and Head HR for our Investment
Bank.
Professional experience
January
2026
–
date
Group Chief Compliance and Operational Risk Control
Officer, UBS Group AG and Chief Compliance and
Operational Risk Control Officer, UBS AG
2023 –
December 2025
Group Integration Officer, UBS Group AG and Integration
Officer, UBS AG
2021 – 2023
Country Head UBS Asset Management UK and
CEO Asset Management UK Ltd
2020 – 2023
COO, UBS Asset Management
2018 – 2020
Head of Group Efficiency and Cost Management,
UBS Business Solutions AG
2015 – 2018
Non-Executive Director and Chairman Remuneration
Committee, UBS Limited
2011 – 2014
Global Head Human Resources, UBS Investment Bank
2011
Global Strategic Projects at CEO Management Office,
UBS Investment Bank
2009 – 2010
Chief of Staff and Joint Global COO, UBS Investment Bank
Education
–
Bachelor’s degree, law, the University of Cambridge
–
Bachelor’s degree, politics, economics and law, the University of
Buckingham
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
Annual Report 2025 |
Corporate governance 123
Mike Dargan
Chief Operations and Technology Officer, member of the EB since
2021 (stepped down on 31 December 2025)
Nationality:
Year of birth:
Mike Dargan was appointed Group Chief Operations and Technology
Officer in 2023 and was accountable for delivering digital platforms,
technology services, infrastructure and operations, including cybersecurity
and information security. until he stepped down in December 2025. In his
role, he drove Group-wide innovative and emerging technology solutions
and digitalization and delivered technology services, tools and
infrastructure, including cyber protection and technology security.
Previously, he was Group Chief Digital and Information Officer (CDIO),
having lead Group Technology since joining UBS in 2016. Prior to joining
UBS, he held various senior roles in technology, corporate strategy and
investment banking at Standard Chartered Bank, Merrill Lynch and Oliver
Wyman.
Professional experience
2023 –
December 2025
Group Chief Operations and Technology Officer,
UBS Group AG, and Chief Operations and
Technology Officer, UBS AG
2021 –
December 2025
President of the Executive Board,
UBS Business Solutions AG
2021 – 2023
Group CDIO, UBS Group AG, and CDIO, UBS AG
2016 – 2021
Head Group Technology, UBS
2015 – 2016
CIO for Corporate and Institutional Banking,
Standard Chartered Bank
2014 – 2015
Global Group Technology and Operations Head for
Global Markets, Wealth Management, Private Banking
and Securities Services, Group Technology and Operations
Engineering, Standard Chartered Bank
2013 – 2014
CIO for Financial Markets, Standard Chartered Bank
2009 – 2013
Global Head of Strategy and Corporate M&A,
Global Markets, Standard Chartered Bank
2005 – 2009
Head Corporate Strategy & M&A, EMEA and Pacific Rim,
Merrill Lynch
Education
–
Master’s degree, politics, philosophy and economics,
St. John’s College, the University of Oxford
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
–
Member of the Board of Directors and President of the Executive
Board of UBS Business Solutions AG
–
Member of the Board of the UBS Optimus Foundation
–
Member of the Advisory Board of SCION Association
Aleksandar Ivanovic
President Asset Management, member of the EB since 2024
Nationality:
Year of birth:
Aleksandar Ivanovic was appointed President Asset Management in 2024.
With his experience and broad network across the UBS Group, he is
leading the Asset Management business division forward, creating an
even stronger organization through integration and offering investment
capabilities and investment styles with industry-leading capabilities on a
truly global scale. Before joining the GEB, he was Head Client Coverage
and Head of the Europe, Middle East and Africa and Switzerland regions
for Asset Management at UBS. Starting as an apprentice at UBS in 1992,
he has worked in all our business divisions and later held various
leadership roles at Credit Suisse and Morgan Stanley.
Professional experience
2024 – date
President Asset Management, UBS Group AG and
UBS AG
2019 – 2024
Head Region Europe, Middle East and Africa, Asset
Management, UBS
2018 – 2024
Head Client Coverage, Asset Management, UBS
2018 – 2024
Head Region Switzerland, Asset Management, UBS
2017 – 2018
Head Institutional Client Coverage,
Asset Management, UBS
2011 – 2016
Head of Europe, Middle East and Africa, Distribution,
Financial Engineering, Structured Products,
Institutional Equity Derivatives, London,
Morgan Stanley
2008 – 2011
Head of Distribution Northern Europe, Structured
Products, Institutional Equity Derivatives, London,
Credit Suisse
2000 – 2008
Various positions in Global Markets,
UBS Investment Bank, London / Switzerland, UBS
Education
–
Master’s degree, finance, London Business School
–
Bachelor’s degree, Economics and Business Administration,
Hochschule für Wirtschaft Zurich
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
–
Chairman of UBS Asset Management AG
–
Chairman of UBS Asset Management Switzerland AG
–
Member of the Board of the UBS Optimus Foundation
Annual Report 2025 |
Corporate governance 124
Robert Karofsky
Co-President Global Wealth Management and
President UBS Americas, member of the EB since 2018
Nationality:
Year of birth:
1967
Robert Karofsky became Co-President Global Wealth Management and
President UBS Americas in 2024. He jointly manages Global Wealth
Management across all regions to ensure an unparalleled global offering
for our wealth management client franchise. As President UBS Americas,
he is responsible for the cross-divisional collaboration and represents the
Group to the broader public in the Americas. Mr. Karofsky was President
Investment Bank from 2021 to 2024 and previously Co-President
Investment Bank from 2018 to 2021. Before that, he was President UBS
Securities LLC from 2015 to 2021. Prior to joining UBS, he acquired know-
how in investment banking as an analyst and trader, working for various
financial institutions, including Morgan Stanley, Deutsche Bank and
AllianceBernstein.
Professional experience
2024 – date
Co-President Global Wealth Management and President
UBS Americas, UBS Group AG and UBS AG
2021 – 2024
President Investment Bank, UBS
2018 – 2021
Co-President Investment Bank, UBS
2015 – 2021
President UBS Securities LLC, UBS
2014 – 2018
Global Head Equities, UBS
2011 – 2014
Global Head of Equity Trading, AllianceBernstein
2008 – 2010
Co-Head of Global Equities, Deutsche Bank
2005 – 2008
Head of North American Equities, Deutsche Bank
Education
–
Bachelor’s degree, economics, Hobart and William Smith Colleges,
New York
–
MBA, finance and statistics, the University of Chicago Booth School of
Business
Other activities and functions
–
Member of the Group Executive Board of
Group
–
Member of the Board of UBS Americas Holding LLC
–
Chair of the Board of the UBS Optimus Foundation US
–
Member of the Board of the American Swiss Foundation
Iqbal Khan
Co-President Global Wealth Management and
President UBS Asia Pacific, member of the EB since 2019
Nationality:
Year of birth:
Iqbal Khan became Co-President Global Wealth Management and
President UBS Asia Pacific in 2024. He jointly manages Global Wealth
Management across all regions to ensure an unparalleled global offering
for our wealth management client franchise. As Regional President UBS
Asia Pacific, he is responsible for the cross-divisional collaboration and
represents the Group to the broader public in the Asia Pacific region.
Previously, he was President Global Wealth Management from 2022 to
2024 and President UBS Europe, Middle East and Africa from 2021 to
2023. He joined UBS in 2019 as Co-President Global Wealth
Management. Prior to UBS, Mr. Khan was at Credit Suisse, holding senior
leadership positions as CFO Private Banking & Wealth Management and
CEO International Wealth Management. He joined Ernst & Young in 2001,
where he held numerous leadership positions and, upon leaving that
company, he served as lead auditor of UBS.
Professional experience
2024 – date
President UBS Asia Pacific, UBS Group AG and UBS AG
2024 – date
Co-President Global Wealth Management, UBS Group
AG and UBS AG
2022 – 2024
President Global Wealth Management, UBS
2021 – 2023
President UBS Europe, Middle East and Africa, UBS
2019 – 2022
Co-President Global Wealth Management, UBS
2015 – 2019
CEO International Wealth Management, Credit Suisse
2013 – 2015
CFO Private Banking & Wealth Management,
Credit Suisse
2011 – 2013
Managing Partner Assurance and Advisory Services –
Financial Services, Ernst & Young
2009 – 2011
Industry Lead Partner Banking and Capital Markets,
Switzerland and EMEA Private Banking, Ernst & Young
2001 – 2009
Various positions in Ernst & Young
Education
–
Swiss Certified Public Accountant
–
Advanced Master of International Business Law (LL.M.) degree,
University of Zurich
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
Annual Report 2025 |
Corporate governance 125
Barbara Levi
General Counsel, member of the EB since 2021
Nationality:
Year of birth:
Barbara Levi has been Group General Counsel since 2021. In her role, she
provides legal advice and manages the Group’s legal affairs, ensuring
effective and timely assessment of legal matters impacting the Group and
its businesses. Before joining UBS, she served as Chief Legal Officer &
External Affairs at Rio Tinto Group and, before that, as General Counsel,
based in London. In both roles, she was a member of that company’s
executive committee. Ms. Levi began her corporate career with Novartis
Group in 2004 and worked there for 16 years, holding a number of senior
legal roles across Europe.
Professional experience
2021 – date
Group General Counsel, UBS Group AG, and
General Counsel, UBS AG
2021
Chief Legal Officer & External Affairs, Rio Tinto Group
2020 – 2021
Group General Counsel, Rio Tinto Group
2019
Group Legal Head, M&A and Strategic Transactions,
Novartis
2016 – 2019
Global General Counsel, Sandoz International GmbH,
Novartis
2014 – 2016
Global Legal Head, Product Strategy & Commercialization,
Novartis
2013 – 2014
Global Legal Head, TechOps, Primary Care and Established
Medicines, Novartis
2009 – 2013
Head of Legal & Compliance, Region Asia-Pacific, Middle
East, and African Countries, Region Group Emerging
Markets, Novartis
Education
–
Law degree, the University of Milan
–
Master of Laws (LL.M.), banking, corporate and finance law, Fordham
University School of Law, New York
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
–
Member of the Board of Directors of the European General Counsel
Association
–
Member of the Legal Committee of the Swiss-American Chamber of
Commerce
Beatriz Martin Jimenez
Chief Operating Officer since January 2026, Head Non-Core and
Legacy and President UBS
Europe, Middle East and Africa
2023, member of the EB since 2023
Nationality:
Year of birth:
Beatriz Martin Jimenez became Group COO in January 2026, with the
Group Technology function reporting to her. Since 2023, she has served
as President UBS Europe, Middle East, and Africa and Head Non-Core and
Legacy. As Group COO, her responsibilities encompass developing and
coordinating the Group-wide operational integration, driving Group-wide
innovative technology solutions and digitalization, delivering technology
services, and overseeing technology enabled change initiatives. The Group
COO is also responsible for the implementation of the Group’s
sustainability and impact strategy, which has been led by Ms. Martin
Jimenez since 2024. Her regional position as President UBS Europe, Middle
East and Africa involves promoting collaboration across business divisions
and representing UBS throughout the region. In addition, Ms. Martin
Jimenez also serves as the Chief Executive for UBS in the UK. As Head
Non-Core and Legacy, she focuses on managing derisking and cost-
reduction efforts tied to the integration proc ess. Before joining UBS, Ms.
Martin Jimenez held a variety of leadership roles in fixed income sales and
trading at both Morgan Stanley and Deutsche Bank.
Professional experience
January 2026 –
date
Group Chief Operating Officer; UBS Group AG and
Chief Operating Officer, UBS AG
2023 – date
President UBS Europe, Middle East and Africa, UBS
Group AG and UBS AG
2023 – date
Head Non-core and Legacy, UBS Group AG and UBS AG
2019 – date
UK Chief Executive, UBS AG London Branch
2024 – 2026
UBS GEB Lead for Sustainability and Impact, UBS Group
AG (transitioned to Group COO responsibilities in 2026)
2022 – 2023
Chief Transformation Officer, UBS Group AG
2020 – 2023
Group Treasurer, UBS Group AG
2015 – 2020
COO, UBS Investment Bank
2015 – 2019
UK COO, UBS AG London Branch and UBS Limited
2012 – 2015
Chief of Staff to CEO, UBS Investment Bank
1996 – 2012
Various positions in Global Markets, Morgan Stanley
and Deutsche Bank
Education
–
Master of Business Administration, Universidad Autónoma de Madrid,
Madrid
–
Erasmus Exchange programme, Hochschule für Bankwirtschaft,
Frankfurt
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
–
Member of the Board of Directors and President of the Executive
Board of UBS Business Solutions AG (as of February 2026)
–
Member of the Supervisory Board of UBS Europe SE
–
Member of the Board of Directors of Credit Suisse International
Annual Report 2025 |
Corporate governance 126
Markus Ronner
Chief Compliance and Governance Officer, member of the EB
since 2018 (stepped down on 31 December 2025)
Nationality:
Year of birth:
Markus Ronner has served as Group Chief Compliance and Governance
Officer from 2018 to December 2025, overseeing compliance, financial
crime prevention and operational risk control as well as regulatory and
governance functions at the Group level. In more than 40 years at UBS,
he acquired deep expertise across businesses and in non-financial risk
management and control. In that time, Mr. Ronner held a variety of senior
positions across the firm, including managing the Group-wide too-big-to-
fail program, COO Wealth Management & Swiss Bank, Head Products and
Services of Wealth Management & Swiss Bank, COO Asset Management,
and Head Group Internal Audit. From 2022 until 2023, he served as
Chairman of UBS Switzerland AG, the leading Swiss universal bank.
Professional experience
2018 –
December 2025
Group Chief Compliance and Governance Officer,
UBS Group AG, and Chief Compliance and Governance
Officer, UBS AG
2022 – 2023
Chairman of UBS Switzerland AG
2012 – 2018
Head Group Regulatory and Governance, UBS
2011 – 2013
Manager Group-wide too-big-to-fail program, UBS
2010 – 2011
COO Wealth Management & Swiss Bank, UBS
2009 – 2010
Head Products and Services of Wealth Management &
Swiss Bank, UBS
2007 – 2009
COO Asset Management, UBS
2001 – 2007
Head Group Internal Audit, UBS
Education
–
Swiss Banking Diploma
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
Stefan Seiler
Head Human Resources and Corporate Services, member of the EB
since 2023
Nationality:
Year of birth:
Stefan Seiler was appointed Head Group Human Resources and Corporate
Services in 2023. In this role, he manages the people, real estate, vendor
management, communications, branding and marketing, and security
functions that support the firm’s long-term success. Since joining UBS in
2011, he has held several key leadership roles, including Head HR for
Switzerland and Group Functions, Global Head Talent and Recruiting, and
Group Head HR since 2018. He started his career at the Swiss Military
Academy at the Swiss Federal Institute of Technology (ETH) Zurich, where
he later returned as Department Head of Leadership and Communication
after broadening his experience in the financial sector at Credit Suisse
from 2002 to 2006. He has worked in Switzerland, the UK, the US and
Singapore.
Professional experience
2023 – date
Head Group Human Resources and Corporate Services,
UBS Group AG and Head Human Resources & Corporate
Services, UBS AG
2018 – 2023
Group Head Human Resources, UBS
2016 – 2018
Global Head Talent & Recruiting, UBS
2014 – 2016
Head HR UBS Switzerland and Global Head HR Group
Control & CEO Functions, UBS
2012 – 2016
Head HR UBS Switzerland, UBS
2011 – 2012
Global Head HR Corporate Center, UBS
2010 – 2011
Visiting Professor, Nanyang Business School, Singapore
2006 – 2011
Department Head of Leadership and Communication,
Swiss Military Academy, ETH Zurich
2002 – 2006
Assessment specialist, HR Transformation Manager and
Global Lead for Human Capital Management
Implementation Group Functions, Credit Suisse, Zurich and
New York
Education
–
Master of Science (lic. Phil.), Educational Psychology, University of
Fribourg
–
PhD in Educational Psychology, University of Fribourg
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
AG
–
Member of the Board of the UBS Optimus Foundation
–
Member of the Foundation Board of the Pension Fund of UBS
–
Member of the Foundation Council of the UBS Center for Economics
in Society, University of Zurich
–
Chairman of the Foundation Board of the Swiss Finance Institute
–
Member of the IMD Foundation Board
–
Adjunct Professor for Leadership and Strategic Human Resource
Management, Nanyang Technological University (NTU), Singapore
Annual Report 2025 |
Corporate governance 127
Todd Tuckner
Chief Financial Officer, member of the EB since 2023
Nationality:
Year of birth:
Todd Tuckner became Group CFO in 2023. In January 2026, he also took
over responsibility for overseeing the Group’s governmental and
regulatory affairs, including developing and maintaining the Group’s
recovery and resolution plans. As Group CFO, he oversees the Group’s
financial accounting, controlling, forecasting, planning and reporting
processes, ensuring the transparency in and the assessment of the
financial performance of the Group and the business divisions. He is also
responsible for managing and controlling the Group’s tax affairs, treasury
and capital management, including funding and liquidity risk, and
regulatory capital ratios. Additionally, he coordinates relations with
analysts and investors alongside the Group CEO. He was previously CFO
and Head Business Performance and Risk Management for our Global
Wealth Management business. Mr. Tuckner joined UBS in 2004 after
working for KPMG for 17 years and has since held various leadership roles
across the Group Finance function.
Professional experience
2023 – date
Group CFO, UBS Group AG and CFO, UBS AG
2020 – 2023
CFO and Head Business Performance and Risk
Management, Global Wealth Management, UBS
2016 – 2021
Group Controller and Chief Accounting Officer, UBS
2012 – 2019
Group Finance COO, UBS
2009 – 2012
Group Head Tax & Accounting Policy, UBS
2004 – 2009
Group Head Tax – Americas, UBS
1987 – 2004
Various management positions, KPMG LLP, New York
Education
–
Bachelor’s degree, economics, Princeton University
–
MBA, accounting, New York University
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
AG
–
Member of the Financial Services Chapter Board of the Swiss-
American Chamber of Commerce
Marco Valla
Co-President Investment Bank, member of the EB since 2024
Nationality:
Year of birth:
Marco Valla became Co-President of the Investment Bank in 2024 and
Head of Global Banking in September 2025. He jointly manages the
Investment Bank with George Athanasopoulos across all regions to ensure
an unparalleled global offering for our client franchise. He began his
career at Credit Suisse First Boston in 1994 as an Investment Banking
analyst, before working for Lehman Brothers and Barclays. During his
tenure at Barclays, he was the Global Head of Technology, Media and
Telecommunications (TMT) and Consumer Retail Investment Banking,
overseeing the coverage of technology, media, telecommunications,
consumer and retail clients, and a member of the Investment Banking
Management Committee.
Professional experience
2024 – date
Co-President of the Investment Bank, UBS Group AG
and UBS AG
September 2025 –
date
Head of Global Banking
2023 – 2024
Co-Head of Global Banking, Investment Banking, UBS
2020 – 2023
Global Head of TMT and Consumer Retail, Investment
Banking
Member of the Investment Banking Management
Committee, Barclays
2013 – 2019
Global Co-Head of Consumer Retail Group, Investment
Banking, Barclays
2008 – 2013
Managing Director, Retail Group, Investment Banking,
Barclays
2005 – 2008
Managing Director, Retail Group, Investment Banking,
Lehman Brothers
1994 – 2005
Investment Banking, Credit Suisse First Boston
Education
–
Bachelor’s degree, economics and Italian literature, University of
California, Berkeley
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
AG
–
Member of the Board of Directors of Good Shepherd Services
–
Member of the Board of the Mount Sinai Department of Urology
Annual Report 2025 |
Corporate governance 128
Damian Vogel
Chief Risk Officer, member of the EB since 2024
Nationality:
Year of birth:
Damian Vogel was appointed Group Chief Risk Officer in 2024 and is
responsible for the development of the Group’s risk management and
control framework for various risk categories and the implementation of
its independent control frameworks. Since joining UBS in 2010, he held
various risk-related leadership roles across Global Wealth Management,
Personal & Corporate Banking and the Switzerland region before being
appointed Chief Risk Officer for Credit Suisse and Group Risk Control
Head of Integration in 2023. Previously, he worked for Credit Suisse as
Credit Risk Manager and Head Structured Lombard Solutions.
Professional experience
2024 – date
Group Chief Risk Officer, UBS Group AG and Chief Risk
Officer, UBS AG
2023 – 2024
Chief Risk Officer, Credit Suisse AG
Group Risk Control Head Integration, UBS
2018 – 2023
Chief Risk Officer Global Wealth Management, UBS
2016 – 2018
Chief Risk Officer Personal & Corporate Banking and
Region Switzerland, Zurich, UBS
2012 – 2016
Portfolio Underwriter and Head Risk Control Swiss
Corporates, Zurich, UBS
2010 – 2011
Project Manager within Chief Risk Officer Wealth
Management and Swiss Bank, Zurich, UBS
2009 – 2010
Credit Risk Manager, Credit Risk Management
Investment Banking, New York, Credit Suisse
2008 – 2009
Head Structured Lombard Solutions, Credit Risk
Management Private Banking, Zurich, Credit Suisse
1999 – 2008
Various management positions in Credit Suisse
Education
–
Bachelor’s degree, business and administration, University of Applied
Sciences, Visp
–
Executive Program, Stanford University Graduate School of Business
–
Master of Advanced Study, corporate finance, University of Lucerne
Other activities and functions
–
Member of the Group Executive Board of
UBS
Group
AG
–
Member of the Board of Directors of UBS Switzerland AG
–
Member of Foundation Board of the International Financial Risk
Institute
Annual Report 2025 |
Corporate governance 129
Change of control and defense measures
Our Articles of Association (the AoA) do not provide any measures for delaying, deferring or preventing a change of
control.
Clauses on change of control
Neither the terms regulating the BoD members’ mandate nor any employment contracts with EB members contain
change of control clauses.
All employment contracts with EB members stipulate a notice period of six to twelve months. During the notice period,
EB members are entitled to their salaries and the continuation of existing employment benefits and may be eligible to be
considered for a discretionary performance award based on their contribution during their tenure.
In case of a change of control, we may, at our discretion, accelerate the vesting of and / or relax applicable forfeiture
provisions of employees’ awards.
Auditors
Audit is an integral part of corporate governance. While safeguarding their independence, the external auditors closely
coordinate their work with Internal Audit. The Audit Committee and, ultimately, the BoD supervise the effectiveness of
audit work.
›
Refer to “Board of Directors” in this section for more information about the Audit Committee
External independent auditors
The 2025 AGM re-elected Ernst & Young Ltd (EY) as auditors for UBS AG for the 2025 financial year. EY assumes virtually
all auditing functions according to laws, regulatory requests and the AoA. In 2025, Isabelle Santenac became the EY lead
partner in charge of the UBS AG financial and regulatory audits and the lead audit partner for the Group financial
statement audit, with an incumbency limit of five years. Since 2023, Robert Wadley has been a partner on the financial
statement audit, and in 2025 he became the co-signing partner, with an incumbency limit of seven years. In 2021,
Hannes Smit became the Lead Auditor to the Swiss Financial Market Supervisory Authority (FINMA), with an incumbency
limit of seven years. Daniel Martin has been the co-signing partner for the FINMA audit since 2019, with an incumbency
limit of seven years. Mr. Martin will be succeeded in 2026 by Martin Wauri ck, who will assume the role of co-signing
partner for the FINMA audits, with an incumbency limit of seven years.
During 2025, the Audit Committee held 12 meetings with the external auditors.
Audit effectiveness assessment
The Audit Committee assesses the performance, effectiveness and independence of the external auditors on an annual
basis. The assessment is generally based on interviews with senior management and survey feedback from stakeholders
across the Group. Assessment criteria include quality of service delivery, quality and competence of the audit team, value
added as part of the audit, insightfulness, and the overall relationship with EY. Based on its own analysis and the
assessment results, including feedback received as part of the review of the Group audit engagement described above,
the Audit Committee concluded that EY’s audit has been effective.
Services performed by EY and related fees
The Audit Committee oversees all services provided to UBS by the external auditors. For services requiring the approval
from the Audit Committee, a preapproval may be granted either for a specific mandate or in the form of a blanket
preapproval authorizing a limited and well-defined type and scope of services. The fees (including expenses) paid to EY
are set forth in the table below.
Audit work includes all services necessary to perform the audit for UBS AG in accordance with applicable laws and
generally accepted auditing standards, as well as other assurance services that conventionally only the auditor can
provide. These include statutory and regulatory audits, attestation services and the review of documents to be filed with
regulatory bodies. The additional services classified as audit in 2025 included several engagements for which EY was
mandated at the request of FINMA.
Audit-related work consists of assurance and related services traditionally performed by auditors, such as attestation
services related to financial reporting, internal control reviews and performance standard reviews, as well as consultation
concerning financial accounting and reporting standards.
Tax work involves services performed by professional staff in EY’s tax division and includes tax compliance and tax
consultation with respect to our own affairs.
“Other” services are permitted services, which include technical IT security control reviews and assessments.
In addition, EY received USD 53m in 2025 (USD 52m in 2024) for services performed on behalf of our investment funds,
many of which have independent fund boards or trustees.
Annual Report 2025 |
Corporate governance 130
Fees paid to EY
UBS AG and its subsidiaries paid the following fees (including expenses) to EY.
For the year ended
USD m
31.12.25
31.12.24
Audit
Global audit fees
Additional services classified as audit (services required by law or statute, including work of a non-recurring nature mandated by regulators)
Total audit
Non-audit
Audit-related fees
of which: assurance and attestation services
of which: control and performance reports
of which: consultation concerning financial accounting and reporting standards
Tax fees
All other fees
Total non-audit
Special auditors for potential capital increases
At the AGM on 23 April 2024, BDO AG was reappointed as special auditors for a three-year term of office. Special
auditors provide audit opinions in connection with potential capital increases independently from other auditors.
Internal Audit
Internal Audit performs the internal auditing role for UBS AG. It is an independent function that provides expertise and
insights to confirm controls are functioning correctly and highlight where UBS needs to better manage current and
emerging risks.
Internal Audit supports the BoD in discharging its governance responsibilities by taking a dynamic approach to audit,
issue assurance and risk assessment, confirming where controls are functioning well and highlighting where UBS needs
to better manage current and emerging risks. By doing so, it drives action to prevent unexpected loss or damage to the
firm’s reputation. To support the achievement of UBS’s objectives, Internal Audit independently, objectively and
systematically assesses the:
(i)
soundness of UBS AG’s risk and control culture;
(ii)
reliability and integrity of financial and operational information, including whether activities are properly, accurately
and completely recorded, and the quality of underlying data and models; and
(iii)
design, operating effectiveness and sustainability of:
–
processes to define strategy and risk appetite, as well as the overall adherence to the approved strategy;
–
governance processes;
–
risk management, including whether risks are appropriately identified and managed;
–
internal controls, specifically whether they are commensurate with the risks taken;
–
remediation activities; and
–
processes to comply with legal and regulatory requirements, internal policies, and UBS AG’s constitutional
documents and contracts.
Annual Report 2025 |
Corporate governance 131
Audit reports that include significant issues are provided to the President of the EB, relevant EB members and other
responsible management. The Chairman, the Audit Committee and the Risk Committee of the BoD are regularly informed
of such issues.
In addition, Internal Audit provides independent assurance on the effective and sustainable remediation of control
deficiencies within its mandate, taking a prudent and conservative risk-based approach and assessing at the issue level
whether the root cause and the potential exposure for the firm have been holistically and sustainably addressed. Internal
Audit also cooperates closely with risk control functions and internal and external legal advisors on investigations into
major control issues.
To ensure Internal Audit’s independence from management, the Internal Audit Executive UBS AG reports to the Chairman
of the BoD and to the Audit Committee, which assesses annually whether Internal Audit has sufficient resources to
perform its function, as well as its independence and performance. In the Audit Committee’s assessment, Internal Audit
is sufficiently resourced to fulfill its mandate and complete its auditing objectives. Internal Audit’s role, position,
responsibilities and accountability are set out in UBS AG’s Organization Regulations and the Charter for Internal Audit
.
Internal Audit has unrestricted access to all accounts, books, records, systems, property and personnel, and must be
provided with all information and data that it needs to fulfill its auditing responsibilities. Internal Audit also conducts
special audits at the request of the Audit Committee, or other BoD members, committees or the President of the EB in
consultation with the Audit Committee.
Internal Audit enhances the efficiency of its work through coordination and close cooperation with the external auditors.
Information policy
We provide regular information to our shareholder and to the wider financial community.
Financial reports for UBS AG are expected to be published on the following dates:
First quarter 2026
5 May 2026
Second quarter 2026
31 July 2026
Third quarter 2026
30 October 2026
The annual general meetings of the shareholders of UBS AG will take place on the following dates:
2026
14 April 2026
2027
7 April 2027
›
Refer to the corporate calendar available at
ubs.com/investors
dates
Our annual and quarterly publications are available in fully online and .pdf formats at
ubs.com/investors
, under “Financial
information”.
Financial reporting policies
We report UBS AG’s results for each financial quarter, with the exception of the fourth quarter, including a breakdown
of results by business division and disclosures or key developments relating to risk management and control, capital,
liquidity and funding management. With the exception of the fourth quarter, each quarter we publish quarterly financial
reports for UBS AG.
The consolidated financial statements of UBS AG are prepared in accordance with IFRS Accounting Standards as issued
by the International Accounting Standards Board.
›
Refer to “Note 1 Summary of material accounting policies” in the “Consolidated financial statements” section of this report for
more information about the basis of accounting
US disclosure requirements
As a foreign private issuer, we must file reports and other information, including certain financial reports, with the US
Securities and Exchange Commission (the SEC) under the US federal securities laws.
An evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a–15e) under the US
Securities Exchange Act of 1934 has been carried out, under the supervision of management, including the Group CEO,
the Group CFO and the Group Controller. Based on that evaluation, and reflecting the determination that our internal
control over financial reporting was effective as of 31 December 2025, the President of the Executive Board and the CFO
concluded that our disclosure controls and procedures were effective as of 31 December 2025.
No significant changes have been made to our internal controls or to other factors that could significantly affect these
controls subsequent to the date of their evaluation.
›
Refer to the “Consolidated financial statements” section of this report for more information
Annual Report 2025 |
Financial statements | Consolidated financial statements 132
Financial statements
Consolidated financial statements
Table of contents
133
Management’s report on internal control over financial
reporting
133
Reports of the independent registered public accounting
firm / statutory auditor included in this report
134
Report of independent registered public accounting firm on
the financial statements
138
UBS AG consolidated financial statements
138
Primary financial statements
138
Income statement
139
Statement of comprehensive income
140
Balance sheet
141
Statement of changes in equity
143
Share information and earnings per share
144
Statement of cash flows
146
Notes to the UBS AG consolidated financial statements
146
1
Summary of material accounting policies
163
2a
Segment reporting
165
2b
Segment reporting by geographic location
166
Income statement notes
166
3
Net interest income and other net income from
financial instruments measured at fair value through
profit or loss
166
4
Net fee and commission income
167
5
Other income
167
6
Personnel expenses
167
7
General and administrative expenses
168
8
Income taxes
171
Balance sheet notes
171
9
Financial assets at amortized cost and other
positions in scope of expected credit loss
measurement
175
10
Derivative instruments
177
11
Property, equipment and software
177
12
Goodwill and intangible assets
179
13
Other assets
180
14
Amounts due to banks, Customer deposits, and
Funding from UBS Group AG
181
15
Debt issued designated at fair value
181
16
Debt issued measured at amortized cost
182
17
Provisions and contingent liabilities
189
18
Other liabilities
190
Additional information
190
19
Expected credit loss measurement
201
20
Fair value measurement
215
21
Offsetting financial assets and financial liabilities
217
22
Restricted and transferred financial assets
219
23
Maturity analysis of assets and liabilities
222
24
Hedge accounting
225
25
Post-employment benefit plans
231
26
Employee benefits: variable compensation
235
27
Interests in subsidiaries and other entities
239
28
Changes in organization and acquisitions and
disposals of subsidiaries and businesses
240
29
Related parties
243
30
Invested assets and net new money
244
31
Currency translation rates
244
32
Main differences between IFRS Accounting
Standards and Swiss GAAP
246
33
Supplemental guarantor information
247
Comparison between UBS AG consolidated and
UBS Group AG consolidated
Annual Report 2025 |
Financial statements | Consolidated financial statements 133
Management’s report on internal control over financial reporting
Management’s responsibility for internal control over financial reporting
The Board of Directors and management of UBS AG are responsible for establishing and maintaining adequate internal
controls over financial reporting. UBS AG’s internal controls over financial reporting are designed to provide reasonable
assurance regarding the preparation and fair presentation of published financial statements in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board (IASB).
UBS AG’s internal controls over financial reporting include those policies and procedures that:
–
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and
dispositions of assets;
–
provide reasonable assurance that transactions are recorded as necessary to permit preparation and fair presentation
of financial statements, and that receipts and expenditures of the company are being made only in accordance with
authorizations of UBS AG management; and
–
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Management’s assessment of internal control over financial reporting as of 31 December
2025
UBS AG management has assessed the effectiveness of UBS AG’s internal control over financial reporting as of
31 December 2025 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Based on this assessment,
management believes that, as of 31 December 2025, UBS AG’s internal control over financial reporting was effective.
Remediation of Credit Suisse material weaknesses
In March 2023, prior to the acquisition by UBS Group AG, the Credit Suisse Group and Credit Suisse AG disclosed that
their management had identified material weaknesses in internal control over financial reporting as a result of which the
Credit Suisse Group and Credit Suisse AG had concluded that, as of 31 December 2022 and 2021, their internal control
over financial reporting was not effective. Following the acquisition and merger of Credit Suisse Group AG into UBS
Group AG in June 2023, Credit Suisse AG concluded that as of 31 December 2023 its internal control over financial
reporting continued to be ineffective.
Since the Credit Suisse acquisition, UBS has executed a remediation program to address the identified material
weaknesses and has implemented additional controls and procedures.
As of 31 December 2024, management assessed that the changes to internal controls made to address the material
weaknesses relating to the classification and presentation of the consolidated statement of cash flows, as well as
assessment and communication of the severity of deficiencies, were designed and operating effectively. The remaining
material weakness related to the risk assessment of internal controls. During 2024, UBS integrated the Credit Suisse
control framework into the UBS internal control framework and risk assessment and evaluation processes. In addition,
UBS reviewed the processes, systems and internal controls in connection with the integration of Credit Suisse into UBS
and implemented additional processes and controls to reflect the increase in complexity of the accounting and financial
control environment following the acquisition. Management assessed that the risk assessment process was designed
effectively.
However, considering the increased complexity of the internal accounting and control environment, the remaining
migration efforts still underway and limited time to demonstrate operating effectiveness and sustainability of the post-
merger integrated control environment, management concluded that additional evidence of effective operation of the
remediated controls was required to conclude that the risk assessment processes were operating effectively on a
sustainable basis. In light of the above, management concluded that there was a material weakness in internal control
over financial reporting at 31 December 2024.
As of 31 December 2025, UBS AG management has assessed the effectiveness of UBS AG’s risk assessment process and
concluded that changes made to the risk assessment processes were designed and operating effectively, with significant
integration and migration steps completed. UBS AG management has therefore concluded that the risk assessment
material weakness has been remediated.
Report of the independent registered public accounting firm included in this report
The accompanying report of the independent registered public accounting firm on the consolidated financial statements
Report of independent registered public accounting firm on the consolidated financial statements
of UBS AG is included
in our filing on 9 March 2026 with the Securities and Exchange Commission on Form 20-F pursuant to US reporting
obligations.
Annual Report 2025 |
Financial statements | Consolidated financial statements 134
Annual Report 2025 |
Financial statements | Consolidated financial statements 135
Annual Report 2025 |
Financial statements | Consolidated financial statements 136
Annual Report 2025 |
Financial statements | Consolidated financial statements 137
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 138
UBS AG consolidated financial statements
Primary financial statements and share information
Audited |
Income statement
For the year ended
USD m
Note
31.12.25
31.12.24
31.12.23
Interest income from financial instruments measured at amortized cost and fair value through
other comprehensive income
3
Interest expense from financial instruments measured at amortized cost
3
(26,477 )
(29,745 )
(19,643 )
Net interest income from financial instruments measured at fair value through profit or loss and other
3
Net interest income
3
Other net income from financial instruments measured at fair value through profit or loss
3
Fee and commission income
4
Fee and commission expense
4
(2,669 )
(2,369 )
(1,790 )
Net fee and commission income
4
Other income
5
(17 )
Total revenues
Credit loss expense / (release)
19
Personnel expenses
6
General and administrative expenses
7
Depreciation, amortization and impairment of non-financial assets
11, 12
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
8
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 139
Statement of comprehensive income
For the year ended
USD m
Note
31.12.25
31.12.24
31.12.23
Comprehensive income attributable to shareholders
Net profit / (loss)
Other comprehensive income that may be reclassified to the income statement
Foreign currency translation
Foreign currency translation movements related to net assets of foreign operations, before tax
1
(2,629 )
Effective portion of changes in fair value of hedging instruments designated as net investment hedges, before tax
(2,190 )
(912 )
Foreign currency translation differences on foreign operations reclassified to the income statement
(80 )
Effective portion of changes in fair value of hedging instruments designated as net investment hedges reclassified to
the income statement
(12 )
(28 )
Income tax relating to foreign currency translations, including the effect of net investment hedges
(4 )
(17 )
Subtotal foreign currency translation, net of tax
2
(1,261 )
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
Net realized (gains) / losses reclassified to the income statement from equity
Income tax relating to net unrealized gains / (losses)
Subtotal financial assets measured at fair value through other comprehensive income, net of tax
Cash flow hedges of interest rate risk
24
Effective portion of changes in fair value of derivative instruments designated as cash flow hedges, before tax
(1,198 )
(36 )
Net (gains) / losses reclassified to the income statement from equity
Income tax relating to cash flow hedges
(302 )
(74 )
(309 )
Subtotal cash flow hedges, net of tax
Cost of hedging
24
Cost of hedging, before tax
(87 )
(19 )
Income tax relating to cost of hedging
Subtotal cost of hedging, net of tax
(87 )
(19 )
Total other comprehensive income that may be reclassified to the income statement, net of tax
(714 )
Other comprehensive income that will not be reclassified to the income statement
Defined benefit plans
25
Gains / (losses) on defined benefit plans, before tax
(106 )
(103 )
Income tax relating to defined benefit plans
(36 )
(33 )
Subtotal defined benefit plans, net of tax
(6 )
(86 )
(136 )
Own credit on financial liabilities designated at fair value
20
Gains / (losses) from own credit on financial liabilities designated at fair value, before tax
(569 )
(861 )
Income tax relating to own credit on financial liabilities designated at fair value
(10 )
Subtotal own credit on financial liabilities designated at fair value, net of tax
(567 )
(790 )
Total other comprehensive income that will not be reclassified to the income statement, net of tax
(573 )
(21 )
(927 )
Total other comprehensive income
(735 )
Total comprehensive income attributable to shareholders
Comprehensive income attributable to non-controlling interests
Net profit / (loss)
Total other comprehensive income that will not be reclassified to the income statement, net of tax
(48 )
Total comprehensive income attributable to non-controlling interests
Total comprehensive income
Net profit / (loss)
Other comprehensive income
(783 )
of which: other comprehensive income that may be reclassified to the income statement
(714 )
of which: other comprehensive income that will not be reclassified to the income statement
(558 )
(69 )
(924 )
Total comprehensive income
1 Includes foreign currency translation differences as incurred by UBS AG’s associates where UBS AG has recorded its share in these differences. The year ended 31 December 2025 includes a USD
m gain from UBS
AG’s share of a reclassification of foreign currency translation differences to the income statement as recorded by an associate of UBS AG. 2 Mainly reflects a weakening of the US dollar against the Swiss franc and
the euro.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 140
Balance sheet
USD m
Note
31.12.25
31.12.24
Assets
Cash and balances at central banks
Amounts due from banks
9
Receivables from securities financing transactions measured at amortized cost
9, 21
Cash collateral receivables on derivative instruments
9, 21
Loans and advances to customers
9
Other financial assets measured at amortized cost
9, 13a
Total financial assets measured at amortized cost
Financial assets at fair value held for trading
20
of which: assets pledged as collateral that may be sold or repledged by counterparties
Derivative financial instruments
10, 20, 21
Brokerage receivables
20
Financial assets at fair value not held for trading
20
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
20
Investments in associates
27b
Property, equipment and software
11
Goodwill and intangible assets
12
Deferred tax assets
8
Other non-financial assets
13b
Total assets
Liabilities
Amounts due to banks
14a
Payables from securities financing transactions measured at amortized cost
21
Cash collateral payables on derivative instruments
21
Customer deposits
14a
Funding from UBS Group AG measured at amortized cost
14b
Debt issued measured at amortized cost
16
Other financial liabilities measured at amortized cost
18a
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
20
Derivative financial instruments
10, 20, 21
Brokerage payables designated at fair value
20
Debt issued designated at fair value
15, 20
Other financial liabilities designated at fair value
18b, 20
Total financial liabilities measured at fair value through profit or loss
Provisions
17a
Other non-financial liabilities
18c
Total liabilities
Equity
Share capital
Share premium
Retained earnings
(2,147 )
Other comprehensive income recognized directly in equity, net of tax
Equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 141
Statement of changes in equity
USD m
Share
capital
Share
premium
Retained
earnings
Balance as of 31 December 2022
Premium on shares issued and warrants exercised
(19 )
2
Tax (expense) / benefit
Dividends
(6,000 )
Translation effects recognized directly in retained earnings
Share of changes in retained earnings of associates and joint ventures
(1 )
Share capital currency change
(48 )
New consolidations / (deconsolidations) and other increases / (decreases)
3
Total comprehensive income for the year
of which: net profit / (loss)
of which: OCI, net of tax
(927 )
Balance as of 31 December 2023
Equity recognized due to the merger of UBS AG and Credit Suisse AG
4
(18,848 )
Premium on shares issued and warrants exercised
(20 )
2
Tax (expense) / benefit
Dividends
(3,000 )
Translation effects recognized directly in retained earnings
(33 )
Share of changes in retained earnings of associates and joint ventures
(3 )
New consolidations / (deconsolidations) and other increases / (decreases)
(431 )
5
Total comprehensive income for the year
of which: net profit / (loss)
of which: OCI, net of tax
(21 )
Balance as of 31 December 2024
Premium on shares issued and warrants exercised
(1 )
2
Tax (expense) / benefit
Dividends
(13,000 )
Translation effects recognized directly in retained earnings
Share of changes in retained earnings of associates and joint ventures
(2 )
New consolidations / (deconsolidations) and other increases / (decreases)
(86 )
Total comprehensive income for the year
of which: net profit / (loss)
of which: OCI, net of tax
(573 )
Balance as of 31 December 2025
(2,147 )
1 Excludes other comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings. 2 Includes decreases related to recharges by UBS Group AG for share-based
compensation awards granted to employees of UBS AG or its subsidiaries. 3 Includes an increase of USD
m related to the issuance of high-trigger loss-absorbing additional tier 1 capital with an equity conversion
feature. 4 Refer to Note 28 for more information. 5 Mainly reflecting effects from transactions between Credit Suisse AG and its subsidiaries and UBS AG and its subsidiaries prior to the merger in May 2024.
6 Includes an increase of USD
m in the second quarter of 2024 due to the merger of UBS AG and Credit Suisse AG. 7 Mainly reflects effects from UBS AG’s increase in its stake in UBS Securities China from
%
to
% and UBS AG’s sale of a
% stake in another subsidiary, Credit Suisse Securities (China) Limited. Refer to Note 28 for more information.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 142
Other comprehensive
income recognized
directly in equity,
net of tax
1
of which:
foreign currency
translation
of which:
financial assets at
fair value through OCI
of which:
cash flow
hedges
of which:
cost of hedging
Total equity
attributable to
shareholders
Non-controlling
interests
Total equity
(133 )
(4 )
(4,234 )
(19 )
(19 )
(6,000 )
(4 )
(6,004 )
(127 )
(127 )
(1 )
(1 )
(31 )
(19 )
(19 )
(2,961 )
(13 )
(291 )
(291 )
(20 )
(20 )
(3,000 )
(30 )
(3,029 )
(3 )
(3 )
(405 )
6
(51 )
6
(714 )
(1,261 )
(87 )
(714 )
(1,261 )
(87 )
(735 )
(48 )
(783 )
(2,585 )
(100 )
(1 )
(1 )
(13,000 )
(86 )
(13,086 )
(50 )
(50 )
(2 )
(2 )
(86 )
(283 )
7
(370 )
7
(1,339 )
(44 )
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 143
Share information and earnings per share
Ordinary share capital
As of 31 December 2025, UBS AG had
. The
shares were entirely held by UBS Group AG.
Conditional capital
As of 31 December 2025, the following conditional capital was available to the Board of Directors (the BoD) of UBS AG:
–
Conditional capital in the amount of USD
, for the issuance of a maximum of
registered shares with a nominal value of USD
conversion rights and / or warrants granted in connection with the issuance of bonds or similar financial instruments
on national or international capital markets. This conditional capital allowance was approved at the Extraordinary
General Meeting held on 26 November 2014, having originally been approved at the Annual General Meeting
(the AGM) of UBS AG on 14 April 2010. The BoD has not made use of such allowance.
Conversion capital
As of 31 December 2025, UBS AG had conversion capital in the amount of USD
, for the issuance of a
maximum of
registered shares only occurs through the mandatory conversion of claims arising upon the occurrence of one or more
trigger events under financial market instruments with contingent conversion features issued by UBS AG. The creation
of this conversion capital was approved at the AGM held on 23 April 2024.
Capital band and reserve capital
As of 31 December 2025, UBS AG had not introduced any capital band or any reserve capital.
Earnings per share
In 2015, UBS AG shares were delisted from the SIX Swiss Exchange and the New York Stock Exchange. As of 31 December
2025,
% of UBS AG’s issued shares were held by UBS Group AG and therefore were not publicly traded. Accordingly,
earnings per share information is not provided for UBS AG.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 144
Statement of cash flows
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Cash flow from / (used in) operating activities
Net profit / (loss)
Non-cash items included in net profit and other adjustments
Depreciation, amortization and impairment of non-financial assets
Credit loss expense / (release)
Share of net (profit) / loss of associates and joint ventures and impairment related to associates
(77 )
(73 )
Deferred tax expense / (benefit)
(703 )
(1,106 )
(222 )
Net loss / (gain) from investing activities
(346 )
(225 )
Net loss / (gain) from financing activities
(3,643 )
Other net adjustments
1
(27,927 )
(10,383 )
Net change in operating assets and liabilities
1,2
Amounts due from banks and amounts due to banks
(154 )
(708 )
(10,093 )
3
Receivables from securities financing transactions measured at amortized cost
(19,580 )
(4,993 )
Payables from securities financing transactions measured at amortized cost
Cash collateral on derivative instruments
(6,132 )
Loans and advances to customers
(12,523 )
Customer deposits
(9,259 )
(13,407 )
Financial assets and liabilities at fair value held for trading and derivative financial instruments
(27,623 )
(16,017 )
Brokerage receivables and payables
(6,101 )
Financial assets at fair value not held for trading and other financial assets and liabilities
(12,965 )
(4,661 )
Provisions and other non-financial assets and liabilities
(4,590 )
Income taxes paid, net of refunds
(1,844 )
(1,500 )
(1,541 )
Net cash flow from / (used in) operating activities
4
(27,065 )
(28,202 )
Cash flow from / (used in) investing activities
Cash and cash equivalents obtained due to the merger of UBS AG and Credit Suisse AG
5
Purchase of subsidiaries, businesses, associates and intangible assets
(17 )
(64 )
(4 )
Disposal of subsidiaries, businesses, associates and intangible assets
6
7
Purchase of property, equipment and software
(1,859 )
(1,512 )
(1,283 )
Disposal of property, equipment and software
Purchase of financial assets measured at fair value
8
(16,717 )
(4,638 )
(4,157 )
Disposal and redemption of financial assets measured at fair value
8
Purchase of debt securities measured at amortized cost
(21,569 )
(5,962 )
(14,244 )
Disposal and redemption of debt securities measured at amortized cost
Net cash flow from / (used in) investing activities
(22,299 )
(4,924 )
Table continues below.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 145
Statement of cash flows (continued)
Table continued from above.
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Cash flow from / (used in) financing activities
Repayment of Swiss National Bank funding
9
(10,304 )
Net issuance (repayment) of short-term debt measured at amortized cost
(6,163 )
Distributions paid on UBS AG shares
(13,000 )
(3,000 )
(6,000 )
Issuance of debt designated at fair value and long-term debt measured at amortized cost
10
Repayment of debt designated at fair value and long-term debt measured at amortized cost
10
(153,038 )
(118,286 )
(85,541 )
Inflows from securities financing transactions measured at amortized cost
11
Outflows from securities financing transactions measured at amortized cost
11
(2,734 )
(2,688 )
Net cash flows from other financing activities
(935 )
(965 )
(501 )
Net cash flow from / (used in) financing activities
(33,760 )
(32,137 )
Total cash flow
Cash and cash equivalents at the beginning of the year
Net cash flow from / (used in) operating, investing and financing activities
(31,497 )
(13,435 )
Effects of exchange rate differences on cash and cash equivalents
1
(10,315 )
Cash and cash equivalents at the end of the year
12
of which: cash and balances at central banks
13
of which: amounts due from banks
13
of which: money market paper
13,14
Additional information
Net cash flow from / (used in) operating activities includes:
Interest received in cash
Interest paid in cash
Dividends on equity investments, investment funds and associates received in cash
6
1 Foreign currency translation and foreign exchange effects on operating assets and liabilities and on cash and cash equivalents are presented within the Other net adjustments line, with the exception of foreign
currency hedge effects related to foreign exchange swaps, which are presented on the line Financial assets and liabilities at fair value held for trading and derivative financial instruments. 2 Excludes non-cash items
arising from the accounting for the merger of UBS AG and Credit Suisse AG. Refer to Note 28 for more information. 3 Mainly reflects funding provided to Credit Suisse. 4 Includes cash receipts from the sale of
loans and loan commitments of USD
m and USD
m within Non-core and Legacy for the years ended 31 December 2025 and 31 December 2024, respectively. 5 Refer to Note 28 for more information.
6 Includes dividends received from associates. 7 Includes cash proceeds of USD
m, net of outflows related to cash and cash equivalents of USD
m, mainly from: the sale of Select Portfolio Servicing, the US
mortgage servicing business of Credit Suisse; the sale of a stake in Credit Suisse Securities (China) Limited; and the sale of a wealth management business in India. For the comparative periods the cash proceeds
received were not materially different from the cash flows net of cash and cash equivalents disposed from losing control of subsidiaries and other businesses as reported. Refer to Note 28 for more information.
8 Includes cash flows in relation to financial assets measured at fair value through other comprehensive income and financial assets measured at fair value through profit or loss. 9 Reflects the repayment of the
Emergency Liquidity Assistance facility to the Swiss National Bank, which was recognized in the Amounts due to banks balance sheet line. 10 Includes funding from UBS Group AG measured at amortized cost
(recognized on the balance sheet in Funding from UBS Group AG) and measured at fair value (recognized on the balance sheet in Other financial liabilities designated at fair value). 11 Reflects cash flows from
securities financing transactions measured at amortized cost that use UBS AG debt instruments as the underlying. 12 As of 31 December 2025, the balance included USD
m (31 December 2024: USD
m;
31 December 2023: USD
m) of Cash and cash equivalents not available for general use by the UBS AG, which consisted of USD
m (31 December 2024: USD
m; 31 December 2023: USD
m)
considered by UBS AG as restricted (refer to Note 22 for more information) and USD
m (31 December 2024: USD
m; 31 December 2023: USD
m) placed at central banks to meet local statutory
minimum reserve requirements. 13 Includes only balances with an original maturity of three months or less. 14 Money market paper is included in the balance sheet under Financial assets at fair value not held
for trading (31 December 2025: USD
m; 31 December 2024: USD
m; 31 December 2023: USD
m), Other financial assets measured at amortized cost (31 December 2025: USD
m; 31 December
2024: USD
m; 31 December 2023: USD
m) and Financial assets at fair value held for trading (31 December 2025: USD
m; 31 December 2024: USD
m; 31 December 2023: USD
m).
Changes in liabilities arising from financing activities
USD m
Debt issued
measured at
amortized
cost
of which:
short-term
1
of which:
long-term
2
Securities
financing
transactions
measured at
amortized
cost
3
Debt issued
designated
at fair value
Swiss
National
Bank
funding
4
Over-the-
counter debt
instruments
5
Funding
from UBS
Group AG
6
Total
Balance as of 31 December 2023
Changes arising upon the merger of UBS AG and Credit Suisse AG
7
Cash flows
(10,590 )
(6,163 )
(4,427 )
(10,059 )
(10,304 )
(2,601 )
(28,172 )
Non-cash changes
(2,610 )
(613 )
(1,997 )
(146 )
(326 )
(1,487 )
(4,166 )
of which: foreign currency translation
(2,045 )
(613 )
(1,432 )
(146 )
(2,328 )
(104 )
(2,558 )
(7,117 )
of which: fair value changes
(207 )
(66 )
of which: hedge accounting and other effects
(565 )
(565 )
(221 )
(14 )
Balance as of 31 December 2024
Cash flows
(8,836 )
(10,529 )
(416 )
(5,688 )
(1,277 )
(3,608 )
(19,825 )
Non-cash changes
(981 )
of which: foreign currency translation
of which: fair value changes
(23 )
of which: hedge accounting and other effects
(306 )
(306 )
(1,080 )
Balance as of 31 December 2025
1 Debt with an original contractual maturity of less than one year. 2 Debt with an original maturity greater than or equal to one year. The classification of debt issued into short-term and long-term does not consider
any early redemption features. 3 Reflects securities financing transactions measured at amortized cost that use UBS AG debt instruments as the underlying. 4 Reflects the Emergency Liquidity Assistance facility
from the Swiss National Bank, which was recognized in the Amounts due to banks balance sheet line. 5 Included in the balance sheet line Other financial liabilities designated at fair value. 6 Includes funding from
UBS Group AG measured at amortized cost (refer to Note 14b) and measured at fair value (refer to Note 18b). 7 Refer to Note 28 for more information about the merger of UBS AG and Credit Suisse AG.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 146
Notes to the UBS AG consolidated financial statements
Note 1 Summary of material accounting policies
The following table provides an overview of information included in this Note.
147
a)
Material accounting policies
147
Basis of accounting
147
Comparability
147
1)
Consolidation and business combinations
147
Consolidation
148
Business combinations
148
Business combinations under common control
148
2)
Financial instruments
148
a.
Recognition
148
b.
Classification, measurement and presentation
152
c.
Loan commitments and financial guarantees
152
d.
Interest income and expense
152
e.
Derecognition
153
f.
Fair value of financial instruments
153
g.
Allowances and provisions for expected credit
losses
156
h.
Restructured and modified financial assets
157
i.
Offsetting
157
j.
Hedge accounting
158
3)
Fee and commission income and expenses
158
4)
Share-based and other deferred compensation plans
159
5)
Post-employment benefit plans
159
6)
Income taxes
160
7)
Investments in associates
160
8)
Property, equipment and software
160
9)
Goodwill and other separately identifiable intangible
assets
161
10)
Provisions and contingent liabilities
161
11)
Foreign currency translation
161
12)
Cash and cash equivalents
162
b)
Changes in IFRS Accounting Standards and
Interpretations
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 147
Note 1 Summary of material accounting policies (continued)
a) Material accounting policies
This Note describes the material accounting policies applied in the preparation of the consolidated financial statements
(the Financial Statements) of UBS AG and its subsidiaries (UBS AG). On 6 March 2026, the Financial Statements were
authorized for issue by the UBS AG Board of Directors (the BoD) and are subject to approval by the Annual General
Meeting of Shareholders on 14 April 2026.
Basis of accounting
The Financial Statements have been prepared in accordance with IFRS Accounting Standards, as issued by the
International Accounting Standards Board (the IASB), and are presented in US dollars.
Disclosures marked as audited in the “Risk, capital, liquidity and funding, and balance sheet” section of this report form
an integral part of the Financial Statements. These disclosures relate to requirements under IFRS 7,
Financial Instruments:
Disclosures
, and IAS 1,
Presentation of Financial Statements
, and are not repeated in this section.
The accounting policies described in this Note have been applied consistently in all years presented unless otherwise
stated in Note 1b.
Critical accounting estimates and judgments
Preparation of these Financial Statements under IFRS Accounting Standards requires management to apply judgment and make estimates and assumptions that
affect reported amounts of assets, liabilities, income and expenses and disclosure, of contingent assets and liabilities, and may involve significant uncertainty at the
time they are made. Such estimates and assumptions are based on the best available information. UBS AG regularly reassesses such estimates and assumptions,
which encompass historical experience, expectations of the future and other pertinent factors, to determine their continuing relevance based on current conditions,
updating them as necessary. Changes in those estimates and assumptions may have a significant effect on the Financial Statements. Furthermore, actual results
may differ significantly from UBS AG’s estimates, which could result in significant losses to UBS AG, beyond what was anticipated or provided for.
The following areas contain estimation uncertainty or require critical judgment and have a significant effect on amounts recognized in the Financial
Statements:
–
determination of carrying amounts of assets and liabilities and treatment of reserves for business combinations under common control (refer to item 1 in
this Note and Note 28)
–
expected credit loss measurement (refer to item 2g in this Note and to Note 19);
–
fair value measurement (refer to item 2f in this Note and to Note 20);
–
income taxes (refer to item 6 in this Note and to Note 8);
–
provisions and contingent liabilities (refer to item 10 in this Note and to Note 17); and
–
goodwill (refer to item 9 in this Note and to Note 12).
Comparability
The income statement, the statement of comprehensive income, the statement of changes in equity and the statement
of cash flows for the year ended 31 December 2025 are based entirely on consolidated data following the merger of
UBS AG and Credit Suisse AG. The income statement, the statement of comprehensive income, the statement of changes
in equity (following the addition of the equity reserve balances of Credit Suisse AG recorded from 31 May 2023 to
31 May 2024 as described in Note 28) and the statement of cash flows for the year ended 31 December 2024 include
seven months of consolidated data following the merger of UBS AG and Credit Suisse AG (June through December 2024)
and five months of pre-merger UBS AG data only (January through May 2024). Comparative information for the year
ended 31 December 2023 is based entirely on pre-merger UBS AG data only.
The balance sheet information as at 31 December 2025 and as at 31 December 2024 is based entirely on post-merger
consolidated information.
›
Refer to Note 28 for more information
1) Consolidation and business combinations
Consolidation
The Financial Statements include the financial statements of UBS AG and its subsidiaries, presented as a single economic
entity; intercompany transactions and balances have been eliminated. UBS AG consolidates all entities that it controls,
including structured entities (SEs), which is the case when it has: (i) power over the relevant activities of the entity;
(ii) exposure to the variable returns from involvement with the entity; and (iii) the ability to use its power to affect its own
returns.
Consideration is given to all facts and circumstances to determine whether UBS AG has power over another entity, i.e.
the current ability to direct the relevant activities of an entity when decisions about those activities need to be made.
Subsidiaries, including SEs, are consolidated from the date when control is gained and deconsolidated from the date
when control ceases. Control, or the lack thereof, is reassessed if facts and circumstances indicate that there is a change
to one or more elements required to establish that control is present.
›
Refer to Note 27
for more information
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 148
Note 1 Summary of material accounting policies (continued)
Transactions with subsidiaries of UBS Group AG that are outside of the consolidation scope of UBS AG are not eliminated
in these financial statements. This may lead to differences in presentation between the financial statements of UBS Group
and those of UBS AG, e.g. personnel expenses incurred by UBS Business Solutions entities and recharged to UBS AG
entities are presented by UBS AG in
General and administrative expenses
.
Business combinations
Business combinations are accounted for using the acquisition method. The amount of non-controlling interests, if any,
is measured at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.
Business combinations under common control
A business combination in which the combining entities or businesses are ultimately controlled by UBS both before and
after the business combination and where that control is not transitory is considered to constitute a business combination
under common control as defined by IFRS 3,
Business Combinations
. Business combinations under common control are
outside the scope of IFRS 3.
Critical accounting estimates and judgments
UBS AG accounts for business combinations under common control using the historic carrying values of assets and liabilities of the transferred entity or
business as of the date of the transfer, determined under IFRS Accounting Standards. The balances of each of the equity reserves of the transferred entity,
accumulated after that entity becomes part of the UBS Group, are combined with the corresponding equity reserves (
Share premium
,
Retained earnings
Other comprehensive income recognized directly in equity, net of tax
) of UBS AG. The difference between the aggregate carrying value of the assets and
liabilities and equity reserves is recognized as an adjustment to
Share premium
, net of any consideration that may be payable. Comparative periods prior to
the date of the business combination under common control are not restated, because such transactions are accounted for prospectively.
›
Refer to Note 28 for more information
2) Financial instruments
a. Recognition
UBS AG generally recognizes financial instruments when it becomes a party to contractual provisions of an instrument.
However, UBS AG does not recognize assets received in transfers that do not qualify for derecognition by the transferor
(symmetrically applying derecognition principles under IFRS Accounting Standards as described in item 2e below). UBS AG
applies settlement date accounting to all standard purchases and sales of non-derivative financial instruments.
UBS AG may act in a fiduciary capacity for individuals, trusts, retirement benefit plans and other institutions, holding or
placing assets on their behalf. Unless these activities qualify for recognition, applying the above criteria, such assets are
not recognized on UBS AG’s balance sheet.
Client cash balances associated with derivatives clearing and execution services are not recognized on the balance sheet
if, through contractual agreement, regulation or practice, UBS AG neither obtains benefits from nor controls such cash
balances.
b. Classification, measurement and presentation
Financial assets
Where the contractual terms of a debt instrument held result in cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding, the debt instrument is classified as measured at amortized cost if it
is held within a business model that has an objective of holding financial assets to collect contractual cash flows, or at
fair value through other comprehensive income (FVOCI) if it is held within a business model that has an objective of both
collecting contractual cash flows and selling financial assets.
All other financial assets are measured at fair value through profit or loss (FVTPL), including those held for trading or
those managed on a fair value basis, except for derivatives designated in certain hedge accounting relationships (refer to
item 2j in this Note for more information).
UBS AG determines the nature of a business model by considering the way portfolios of financial assets are managed to
achieve a particular business objective at the time an asset is recognized.
In assessing whether contractual cash flows are SPPI, UBS AG considers whether the contractual terms of the financial
asset contain a term that could change the timing or amount of contractual cash flows arising over the life of the
instrument by a significant amount. This assessment includes contractual cash flows that may vary due to environmental,
social and governance (ESG) triggers.
Annual Report 2025
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Note 1 Summary of material accounting policies (continued)
Financial liabilities
Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost include
Debt issued measured at amortized cost
Funding from UBS
Group AG
measured at amortized cost
. The latter includes contingent capital instruments issued to UBS Group AG prior
to November 2023 that contain contractual provisions under which the principal amounts would be written down upon
either a specified common equity tier 1 (CET1) ratio breach or a determination by the Swiss Financial Market Supervisory
Authority (FINMA) that a viability event has occurred. Such contractual provisions are not derivatives, as the underlying is
deemed to be a non-financial variable specific to a party to the contract. Issuances after November 2023 include a
contractual equity conversion feature with the same triggers, i.e. a CET1 ratio breach or a FINMA-determined viability
event. When the debt is issued in US dollars, these conversion features are classified as equity and are presented in
Share
premium
When the legal bail-in mechanism for write-down or conversion into equity does not form part of the contractual terms
of issued debt instruments, it does not affect the accounting classification of these instruments as debt or equity.
If a debt were to be written down or converted into equity in a future period, it would be partially or fully derecognized,
with the difference between its carrying amount and the fair value of any equity issued recognized in the income
statement, with the conversion features classified as equity always remaining in
Equity attributable to shareholders
.
Financial liabilities measured at fair value through profit or loss
UBS AG designates certain issued debt instruments as financial liabilities at fair value through profit or loss, on the basis
that such financial instruments include embedded derivatives that are not closely related to the host contract and that
significantly impact the cash flows of the instrument and / or are managed on a fair value basis (refer to the table below
for more information). Financial instruments including embedded derivatives arise predominantly from the issuance of
certain structured debt instruments.
Measurement and presentation
On initial recognition, financial instruments are measured at fair value adjusted for directly attributable transaction costs,
unless the instrument is classified at FVTPL, in which case transaction costs are excluded. Financial instruments acquired
through business combinations under common control are initially measured using the historic carrying values of financial
assets and financial liabilities of the transferred entity or business as of the date of the transfer, determined under IFRS
Accounting Standards.
After initial recognition, UBS AG classifies, measures and presents its financial assets and liabilities in accordance with
IFRS 9, as described in the table below.
Classification, measurement and presentation of financial assets
Financial assets classification
Significant items included
Measurement and presentation
Measured at
amortized cost
This classification includes:
–
cash and balances at central banks;
–
amounts due from banks;
–
receivables from securities financing transactions;
–
cash collateral receivables on derivative
instruments;
–
residential and commercial mortgages;
–
corporate loans;
–
secured loans, including Lombard loans, and
unsecured loans; and
–
debt securities held as high-quality liquid assets
(HQLA).
Measured at amortized cost using the effective interest
method less allowances for expected credit losses (ECL)
(refer to items 2d and 2g in this Note for more information).
The following items are recognized in the income
statement:
–
interest income, which is accounted for in accordance
with item 2d in this Note;
–
ECL and reversals; and
–
foreign exchange (FX) translation gains and losses.
When a financial asset at amortized cost is derecognized,
the gain or loss is recognized in the income statement.
For amounts arising from daily settlement of certain
derivatives, see below in this table.
Measured at
FVOCI
Debt
instruments
measured at
FVOCI
This classification primarily includes debt securities
held as HQLA.
Measured at fair value, with unrealized gains and losses
reported in
Other comprehensive income
, net of applicable
income taxes, until such instruments are derecognized.
Upon derecognition, any accumulated balances in
Other
comprehensive income
statement and reported within
Other income.
The following items, which are determined on the same
basis as for financial assets measured at amortized cost, are
recognized in the income statement:
–
interest income, which is accounted for in accordance
with item 2d in this Note;
–
ECL and reversals; and
–
FX translation gains and losses.
Annual Report 2025
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Note 1 Summary of material accounting policies (continued)
Classification, measurement and presentation of financial assets
Financial assets classification
Significant items included
Measurement and presentation
Measured at
FVTPL
Held for
trading
Financial assets held for trading include:
–
all derivatives with a positive replacement value, except
those that are designated and effective hedging
instruments; and
–
other financial assets originated or acquired principally
for the purpose of selling or repurchasing in the near
term, or that are part of a portfolio of identified
financial instruments that are managed together and
for which there is evidence of a recent actual pattern of
short-term profit taking. Included in this category are
debt instruments (including those in the form of
securities, money market paper, and traded corporate
and bank loans) and equity instruments.
Measured at fair value, with changes recognized in the
income statement.
Derivative assets (including derivatives that are designated
and effective hedging instruments) are generally
presented as
Derivative financial instruments
, except those
exchange-traded derivatives (ETD) and over-the-counter
(OTC)-cleared derivatives that are legally settled on a daily
basis or economically net settled on a daily basis, which
are presented within
Cash collateral receivables on
derivative instruments.
Changes in fair value, initial transaction costs, dividends
and gains and losses arising on disposal or redemption are
recognized in
Other net income from financial
instruments measured at fair value through profit or loss
,
except interest income on instruments other than
derivatives (refer to item 2d in this Note), interest on
derivatives designated as hedging instruments in hedges
of interest rate risk and forward points on certain short-
and long-duration FX and interest rate contracts acting as
economic hedges, which are reported in
Net interest
income.
Changes in the fair value of derivatives that are
designated and effective hedging instruments are
presented either in the income statement or
Other
comprehensive income
, depending on the type of hedge
relationship (refer to item 2j in this Note for more
information).
Mandatorily
measured at
FVTPL – Other
Financial assets mandatorily measured at FVTPL that are
not held for trading include:
–
certain structured instruments and receivables from
securities financing transactions that are managed on a
fair value basis;
–
loans managed on a fair value basis, including those
hedged with credit derivatives;
–
certain debt securities held as HQLA and managed on a
fair value basis;
–
brokerage receivables, for which contractual cash flows
do not meet the SPPI criterion because the aggregate
balance is accounted for as a single unit of account,
with interest being calculated on the individual
components;
–
equity instruments; and
–
assets held under unit-linked investment contracts.
Annual Report 2025
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Note 1 Summary of material accounting policies (continued)
Classification, measurement and presentation of financial liabilities
Financial liabilities classification
Significant items included
Measurement and presentation
Measured at amortized cost
This classification includes:
–
demand and time deposits;
–
retail savings / deposits;
–
sweep deposits;
–
payables from securities financing transactions;
–
non-structured debt issued;
–
subordinated debt;
–
commercial paper and certificates of deposit;
–
obligations against funding from UBS Group AG; and
–
cash collateral payables on derivative instruments.
Measured at amortized cost using the effective interest
method.
When a financial liability at amortized cost is
derecognized, the gain or loss is recognized in the income
statement.
Interest income generated from client deposits
derecognized pursuant to certain deposit sweep programs
is presented within
Net interest income from financial
instruments measured at fair value through profit or loss
and other
.
For amounts arising from daily settlement of certain
derivatives, see below in this table.
Measured at
FVTPL
Held for trading
Financial liabilities held for trading include:
–
all derivatives with a negative replacement value
(including certain loan commitments), except those
that are designated and effective hedging
instruments; and
–
obligations to deliver financial instruments, such as
debt and equity instruments, that UBS AG has sold to
third parties but does not own (short positions).
Measurement and presentation of financial liabilities
classified at FVTPL follow the same principles as for
financial assets classified at FVTPL, except that the amount
of change in the fair value of a financial liability
designated at FVTPL that is attributable to changes in
UBS AG’s own credit risk is presented in
Other
comprehensive income
Retained earnings
and is never reclassified to the income statement.
Derivative liabilities (including derivatives that are
designated and effective hedging instruments) are
generally presented as
Derivative financial instruments
,
except those ETD and OTC-cleared derivatives that are
legally settled on a daily basis or economically net settled
on a daily basis, which are presented within
Cash
collateral payables on derivative instruments.
Designated at
FVTPL
Financial liabilities designated at FVTPL include:
–
issued hybrid debt instruments, primarily equity-
linked, credit-linked and rates-linked bonds or notes;
–
issued debt instruments managed on a fair value
basis;
–
obligations against funding from UBS Group AG
managed on a fair value basis;
–
certain payables from securities financing
transactions;
–
amounts due under unit-linked investment contracts,
the cash flows of which are linked to financial assets
measured at FVTPL and eliminate an accounting
mismatch; and
–
brokerage payables, which arise in conjunction with
brokerage receivables and are measured at FVTPL to
achieve measurement consistency.
Annual Report 2025
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Note 1 Summary of material accounting policies (continued)
c. Loan commitments and financial guarantees
Loan commitments are arrangements to provide credit under defined terms and conditions. Irrevocable loan
commitments are classified as: (i) derivative loan commitments measured at fair value through profit or loss; (ii) loan
commitments designated at fair value through profit or loss; or (iii) loan commitments not measured at fair value, in
which case the ECL requirements as set out in item 2g in this Note apply.
Financial guarantee contracts are contracts that require UBS AG to make specified payments to reimburse the holder for
an incurred loss because a specified debtor fails to make payments when due in accordance with the terms of a specified
debt instrument. The ECL requirements as set out in item 2g in this Note apply to financial guarantees issued that are
not accounted for at FVTPL.
Financial guarantee contracts held by UBS AG for credit risk mitigation purposes that are assessed to be integral to the
guaranteed exposure are accounted for as a component of that exposure, with cash flows expected from the credit
enhancement included in the measurement of the ECL of the respective exposure. Rights to reimbursement arising from
financial guarantees held that are not integral to the terms of the exposure they cover are recognized when their
realization is considered to be virtually certain.
d. Interest income and expense
Interest income from financial instruments measured at amortized cost and FVOCI and interest expense from financial
instruments measured at amortized cost are recognized in the income statement based on the effective interest method.
When calculating the effective interest rate (the EIR) for financial instruments (other than credit-impaired financial
instruments), UBS AG estimates future cash flows considering all contractual terms of the instrument, but not expected
credit losses, with the EIR applied to the gross carrying amount of the financial asset or the amortized cost of a financial
liability. However, when a financial asset becomes credit impaired after initial recognition, interest income is determined
by applying the EIR to the amortized cost of the instrument, which represents the gross carrying amount adjusted for any
credit loss allowance.
Upfront fees, including fees on loan commitments not measured at fair value where a loan is expected to be issued, and
direct costs are included within the initial measurement of a financial instrument measured at amortized cost or FVOCI
and recognized over the expected life of the instrument as part of its EIR.
Interest income on financial assets, excluding derivatives, is included in interest income when positive and in interest
expense when negative. Similarly, interest expense on financial liabilities, excluding derivatives, is included in interest
expense, except when interest rates are negative, in which case it is included in interest income.
›
Refer to item 2b in this Note and Note 3 for more information
e. Derecognition
Financial assets
UBS AG derecognizes a transferred financial asset, or a portion of a financial asset, if the purchaser has obtained
substantially all the risks and rewards of the asset or a significant part of the risks and rewards combined with a practical
ability to sell or pledge the asset.
Where financial assets have been pledged as collateral or in similar arrangements, they are considered to have been
transferred if the counterparty has received the contractual rights to the cash flows of the pledged assets, as may be
evidenced by, for example, the counterparty’s right to sell or repledge the assets. In transfers where control over the
financial asset is retained, UBS AG continues to recognize the asset to the extent of its continuing involvement,
determined by the extent to which it is exposed to changes in the value of the transferred asset following the transfer.
›
Refer to Note 22 for more information
Financial liabilities
UBS AG derecognizes a financial liability when it is extinguished, i.e. when the obligation specified in the contract is
discharged, canceled or expires. When an existing financial liability is exchanged for a new one from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, the original liability is
derecognized and a new liability recognized with any difference in the respective carrying amounts recorded in the
income statement.
Most OTC derivative contracts and ETD futures and option contracts cleared through central clearing counterparties and
exchanges are considered to be settled on a daily basis, as the payment or receipt of a variation margin on a daily basis
represents a legal or economic settlement, which results in derecognition of the associated derivatives.
›
Refer to Note 21 for more information
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Note 1 Summary of material accounting policies (continued)
f. Fair value of financial instruments
UBS AG accounts for a significant portion of its financial assets and liabilities at fair value. Fair value is the price on the
measurement date that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction
between market participants in the principal market, or in the most advantageous market in the absence of a principal
market.
›
Refer to Note 20 for more information
Critical accounting estimates and judgments
The use of valuation techniques, modeling assumptions and estimates of unobservable market inputs in the fair valuation of financial instruments requires
significant judgment and could affect the amount of gain or loss recorded for a particular position. Valuation techniques that rely more heavily on
unobservable inputs and sophisticated models inherently require a higher level of judgment and may require adjustment to reflect factors that market
participants would consider in estimating fair value, such as close-out costs, which are presented in Note 20d.
UBS AG’s governance framework over fair value measurement is described in Note 20b, and UBS AG provides a sensitivity analysis of the estimated effects
arising from changing significant unobservable inputs in Level 3 financial instruments to reasonably possible alternative assumptions in Note 20f.
›
Refer to Note 20 for more information
g. Allowances and provisions for expected credit losses
ECL are recognized for financial assets measured at amortized cost, financial assets measured at FVOCI, fee and lease
receivables, financial guarantees, and loan commitments not measured at fair value, including those acquired through a
business combination under common control. ECL are also recognized on the undrawn portion of committed
unconditionally revocable credit lines, which include UBS AG’s credit card limits and master credit facilities, as UBS AG is
exposed to credit risk because the borrower has the ability to draw down funds before UBS AG can take credit risk
mitigation actions.
Recognition of expected credit losses
ECL are recognized on the following basis.
–
Stage 1 – those instruments for which no significant increase in credit risk (SICR) has been observed (see
Significant
increase in credit risk
of lifetime ECL that would result if a default occurs in the 12 months after the reporting date, weighted by the risk of
a default occurring.
–
Stage 2 – those instruments for which an SICR is observed but which are not credit impaired: lifetime ECL are
recognized reflecting lifetime cash shortfalls that would result from all possible default events over the expected life of
a financial instrument, weighted by the risk of a default occurring. When an SICR is no longer observed, the instrument
will move back to stage 1.
–
Stage 3 – credit-impaired financial instruments (as determined by the occurrence of one or more loss events): lifetime
ECL are always recognized by estimating expected cash flows based on a chosen recovery strategy. Credit-impaired
exposures may include positions with nil allowance, for example because they are expected to be fully recoverable
through collateral held.
–
Purchased credit impaired (PCI) – those financial instruments that are purchased at a deep discount or newly originated
with a defaulted counterparty; they remain a separate category until derecognition, with changes in lifetime ECL from
initial recognition recognized as a loss allowance.
All or part of a financial asset is written off if it is deemed uncollectible or forgiven. Write-offs reduce the principal amount
of a claim and are charged against related allowances for credit losses. Recoveries, in part or in full, of amounts previously
written off are credited to
Credit loss expense / (release)
.
ECL are recognized in the income statement in
Credit loss expense / (release)
. A corresponding ECL allowance is reported
as a decrease in the carrying amount of financial assets measured at amortized cost on the balance sheet. For financial
assets that are measured at FVOCI, the carrying amount is not reduced, but an accumulated amount is recognized in
Other comprehensive income
. For off-balance sheet financial instruments and other credit lines, provisions for ECL are
presented in
Provisions.
Default and credit impairment
UBS AG applies a single definition of default for credit risk management purposes, regulatory reporting and ECL, with a
counterparty classified as defaulted based on quantitative and qualitative criteria.
›
Refer to the “Risk management and control” section of this report for more information
Measurement of expected credit losses
IFRS 9 ECL reflect an unbiased, probability-weighted estimate based on loss expectations resulting from default events.
The method used to calculate ECL applies the following principal factors: probability of default (PD), loss given default
(LGD) and exposure at default (EAD). Parameters are generally determined on an individual financial asset level. Based
on the materiality of the portfolio, for credit card exposures and personal account overdrafts in Switzerland, a portfolio
approach is applied that derives an average PD and LGD for the entire portfolio. PDs and LGDs used in the ECL calculation
are point-in-time (PIT)-based for key portfolios and consider both current conditions and expected cyclical changes. For
material portfolios, PDs and LGDs are determined for different scenarios, whereas EAD projections are treated as scenario
independent.
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Note 1 Summary of material accounting policies (continued)
For the purpose of determining the ECL-relevant parameters, UBS AG leverages its Basel III advanced internal ratings-
based (A-IRB) models that are also used in determining expected loss (EL) and risk-weighted assets under the Basel III
framework and Pillar 2 stress loss models. Adjustments have been made to these models and IFRS-9-related models have
been developed that consider the complexity, structure and risk profile of relevant portfolios and take account of the fact
that PDs and LGDs used in the ECL calculation are PIT based, as opposed to the corresponding Basel III through-the-cycle
(TTC) parameters. All models that are relevant for measuring expected credit losses are subject to UBS AG’s model
validation and oversight processes.
Probability of default:
PD represents the probability of a default over a specified time period. A 12-month PD represents
the probability of default determined for the next 12 months and a lifetime PD represents the probability of default over
the remaining lifetime of the instrument. PIT PDs are derived from TTC PDs and scenario forecasts. The modeling is region,
industry and client segment specific and considers both macroeconomic scenario dependencies and client-idiosyncratic
information.
Exposure at default:
EAD represents an estimate of the exposure to credit risk at the time of a potential default occurring,
considering expected repayments, interest payments and accruals, discounted at the EIR. Future drawdowns on facilities
are considered through a credit conversion factor (a CCF) that is reflective of historical drawdown and default patterns
and the characteristics of the respective portfolios.
Loss given default:
LGD represents an estimate of the loss at the time of a potential default occurring, taking into account
expected future cash flows from collateral and other credit enhancements, or expected payouts from bankruptcy
proceedings for unsecured claims and, where applicable, time to realization of collateral and the seniority of claims. LGD is
commonly expressed as a percentage of EAD.
Estimation of expected credit losses
Number of scenarios and estimation of scenario weights
Determination of probability-weighted ECL requires evaluating a range of diverse and relevant future economic conditions,
especially with a view to modeling the non-linear effect of assumptions about macroeconomic factors on the estimate.
To accommodate this requirement, UBS AG uses different economic scenarios in the ECL calculation. Each scenario is
represented by a specific scenario narrative, which is relevant considering the exposure of key portfolios to economic
risks, and for which a set of consistent macroeconomic variables is determined. The estimation of the appropriate weights
for these scenarios is predominantly judgment based. The assessment is based on a holistic review of the prevailing
economic or political conditions, which may exhibit different levels of uncertainty. It takes into account the impact of
changes in the nature and severity of the underlying scenario narratives and the projected economic variables.
The determined weights constitute the probabilities that the respective set of macroeconomic conditions will occur and
not that the chosen particular narratives with the related macroeconomic variables will materialize.
Macroeconomic and other factors
The range of macroeconomic, market and other factors that is modeled as part of the scenario determination is wide,
and historical information is used to support the identification of the key factors. As the forecast horizon increases, the
availability of information decreases, requiring an increase in judgment. For cycle-sensitive PD and LGD determination
purposes, UBS AG projects the relevant economic factors for a period of three years before reverting, over a specified
period, to cycle-neutral PD and LGD for longer-term projections.
Factors relevant for ECL calculation vary by type of exposure. Regional and client-segment characteristics are generally
taken into account, with specific focus on Switzerland and the US, considering UBS AG’s key ECL-relevant portfolios.
For UBS AG, the following forward-looking macroeconomic variables represent the most relevant factors for ECL
calculation:
–
gross domestic product (GDP) growth rates, given their significant effect on borrowers’ performance;
–
unemployment rates, given their significant effect on private clients’ ability to meet contractual obligations;
–
house price indices, given their significant effect on mortgage collateral valuations;
–
interest rates, given their significant effect on counterparties’ abilities to service debt;
–
consumer price indices, given their overall relevance for companies’ performance, private clients’ purchasing power
and economic stability;
–
equity indices, given that they are an important factor in UBS AG’s corporate rating tools; and
–
commodity price indices, given their overall relevance for entities’ performance due to the impact on operating costs.
›
Refer to Note 19 for more information
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Note 1 Summary of material accounting policies (continued)
ECL measurement period
The period for which lifetime ECL are determined is based on the maximum contractual period that UBS AG is exposed
to credit risk, taking into account contractual extension, termination and prepayment options. For irrevocable loan
commitments and financial guarantee contracts, the measurement period represents the maximum contractual period
for which UBS AG has an obligation to extend credit.
Additionally, some financial instruments include both an on-demand loan and a revocable undrawn commitment, where
the contractual cancellation right does not limit UBS AG’s exposure to credit risk to the contractual notice period, as the
borrower has the ability to draw down funds before UBS AG can take risk-mitigating actions. In such cases UBS AG is
required to estimate the period over which it is exposed to credit risk. This applies to UBS AG’s credit card limits, which
do not have a defined contractual maturity date, are callable on demand and where the drawn and undrawn components
are managed as one exposure. The exposure arising from UBS AG’s credit card limits is not significant and is managed at
a portfolio level, with credit actions triggered when balances are past due. An ECL measurement period of seven years is
applied for credit card limits, capped at 12 months for stage 1 balances, as a proxy for the period that UBS AG is exposed
to credit risk.
Customary master credit agreements in the Swiss corporate market also include on-demand loans and revocable undrawn
commitments. For smaller commercial facilities, a risk-based monitoring (RbM) approach is in place that highlights
negative trends as risk events, at an individual facility level, based on a combination of continuously updated risk
indicators. The risk events trigger additional credit reviews by a risk officer, enabling informed credit decisions to be taken.
Larger corporate facilities are not subject to RbM, but are reviewed at least annually through a formal credit review.
UBS AG has assessed these credit risk management practices and considers both the RbM approach and formal credit
reviews as substantive credit reviews resulting in a re-origination of the given facility. Following this, a 12-month
measurement period from the reporting date is used for both types of facilities as an appropriate proxy of the period over
which UBS AG is exposed to credit risk, with 12 months also used as a look-back period for assessing an SICR, always
from the respective reporting date.
Significant increase in credit risk
Financial instruments subject to ECL are monitored on an ongoing basis. To determine whether the recognition of
stage 1 maximum 12-month ECL continues to be appropriate, an assessment is made as to whether an SICR has
occurred since initial recognition of the financial instrument, applying both quantitative and qualitative factors.
Primarily, UBS AG assesses changes in an instrument’s risk of default on a quantitative basis by comparing the annualized
forward-looking and scenario-weighted lifetime PD of an instrument determined at two different dates:
–
at the reporting date; and
–
at inception of the instrument.
If, based on UBS AG’s quantitative modeling, an increase exceeds a set threshold, an SICR is deemed to have occurred
and the instrument is transferred to stage 2 with lifetime ECL recognized.
The threshold applied varies depending on the original credit quality of the borrower, with a higher SICR threshold set
for those instruments with a low PD at inception. The SICR assessment based on PD changes is made at an individual
financial asset level. A high-level overview of the SICR trigger, which is a multiple of the annualized remaining lifetime
PIT PD expressed in rating downgrades, is provided in the “SICR thresholds” table below. The actual SICR thresholds
applied are defined on a more granular level by interpolating between the values shown in the table.
SICR thresholds
Internal rating at origination
of the instrument
Rating downgrades /
SICR trigger
0–3
3
4–8
2
9–13
1
›
Refer to the “Risk management and control” section of this report for more details about UBS AG’s internal rating system
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Note 1 Summary of material accounting policies (continued)
Irrespective of the SICR assessment based on default probabilities, credit risk is generally deemed to have significantly
increased for an instrument if contractual payments are more than 30 days past due. For certain less material portfolios,
specifically the Swiss credit card portfolio, the 30-day past due criterion is used as the primary indicator of an SICR. Where
instruments are transferred to stage 2 due to the 30-day past due criterion, a minimum period of six months is applied
before a transfer back to stage 1 can be triggered, where applicable. For instruments in Personal & Corporate Banking
and Global Wealth Management Region Switzerland that are between 90 and 180 days past due but have not been
reclassified to stage 3, a one-year period is applied before a transfer back to stage 1 can be triggered.
Additionally, based on individual counterparty-specific indicators, external market indicators of credit risk or general
economic conditions, counterparties may be moved to a watch list, which is used as a secondary qualitative indicator for
an SICR. Exception management is further applied, allowing for individual and collective adjustments on exposures
sharing the same credit risk characteristics to take account of specific situations that are not otherwise fully reflected.
In general, the overall SICR determination process does not apply to Lombard loans, securities financing transactions and
certain other asset-based lending transactions, because of the risk management practices adopted, including daily
monitoring processes with strict margining. If margin calls are not satisfied, a position is closed out and classified as a
stage 3 position. In exceptional cases, an individual adjustment and a transfer into stage 2 may be made to take account
of specific facts.
Credit risk officers are responsible for the identification of an SICR, which for accounting purposes is in some respects
different from internal credit risk management processes. This difference mainly arises because ECL accounting
requirements are instrument specific, such that a borrower can have multiple exposures allocated to different stages, and
maturing loans in stage 2 will migrate to stage 1 upon renewal irrespective of the actual credit risk at that time. Under a
risk-based approach, a holistic counterparty credit assessment and the absolute level of risk at any given date will
determine what risk-mitigating actions may be warranted.
›
Refer to the “Risk management and control” section of this report for more information
Critical accounting estimates and judgments
The calculation of ECL requires management to apply significant judgment and make estimates and assumptions that can result in significant changes to the
timing and the amount of ECL recognized.
Determination of a significant increase in credit risk
IFRS 9 does not include a definition of what constitutes an SICR, with UBS AG’s assessment considering qualitative and quantitative criteria. An IFRS 9 ECL
Management Forum has been established to review and challenge the SICR results.
Scenarios, scenario weights and macroeconomic variables
ECL reflect an unbiased and probability-weighted amount, which UBS AG determines by evaluating a range of possible outcomes. Management selects
forward-looking scenarios that include relevant macroeconomic variables and management’s assumptions around future economic conditions. IFRS 9
Scenario Sounding Sessions, in addition to the IFRS 9 ECL Management Forum, are in place to derive, review and challenge the scenario selection and weights,
and to determine whether any additional post-model adjustments are required that may significantly affect ECL.
ECL measurement period
Lifetime ECL are generally determined based upon the contractual maturity of the transaction, which significantly affects ECL. For credit card limits and Swiss
callable master credit facilities, judgment is required, as UBS AG must determine the period over which it is exposed to credit risk. A seven-year period is
applied for credit card limits, capped at 12 months for stage 1 positions, and a 12-month period applied for master credit facilities.
Modeling and post-model adjustments
A number of complex models have been developed or modified to calculate ECL, with additional post-model adjustments required that may significantly
affect ECL. The models are subject to UBS’s Governance of Models policy and the related control framework. The post-model adjustments are approved by
the ECL Management Forum and ratified by the Group Chief Financial Officer and Group Chief Risk Officer.
A sensitivity analysis covering key macroeconomic variables, scenario weights and SICR trigger points on ECL measurement is provided in Note 19f.
›
Refer to Note 19 for more information
h. Restructured and modified financial assets
When payment default is expected, or where default has already occurred, UBS AG may grant concessions to borrowers
experiencing financial difficulties that it would not consider in the normal course of its business, such as preferential
interest rates, extension of maturity, modifying the schedule of repayments, debt / equity swap, subordination, etc.
›
Refer to the “Risk management and control” section of this report for more information
Modifications may result in an alteration of future contractual cash flows and can occur within UBS AG’s normal risk
tolerance or as part of a credit restructuring where a counterparty is in financial difficulties. The restructuring or
modification of a financial asset could lead to a substantial change in the terms and conditions, resulting in the original
financial asset being derecognized and a new financial asset being recognized, measured initially at fair value. Where the
modification does not result in a derecognition, any difference between the modified contractual cash flows discounted
at the original EIR and the existing gross carrying amount of the given financial asset is recognized in the income
statement as of the date of modification.
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Note 1 Summary of material accounting policies (continued)
i. Offsetting
UBS AG presents recognized financial assets and liabilities net on its balance sheet only if (i) it has a legally enforceable
right to set off the recognized amounts and (ii) it intends either to settle on a net basis or to realize the asset and settle
the liability simultaneously. Netted positions include, for example, certain derivatives and repurchase and reverse
repurchase transactions with various counterparties, exchanges and clearing houses.
In assessing whether UBS AG intends to either settle on a net basis, or to realize the asset and settle the liability
simultaneously, emphasis is placed on the effectiveness of operational settlement mechanics in eliminating substantially
all credit and liquidity exposure between the counterparties. This condition precludes offsetting on the balance sheet for
substantial amounts of UBS AG’s financial assets and liabilities, even though they may be subject to enforceable netting
arrangements. Securities financing transactions are presented net only to the extent that the settlement mechanism
eliminates, or results in insignificant, credit and liquidity risk, and processes the receivables and payables in a single
settlement process or cycle.
›
Refer to Note 21
for more information
j. Hedge accounting
UBS AG applies hedge accounting requirements of IFRS 9 where the criteria for documentation and hedge effectiveness
are met. If a hedge relationship no longer meets the criteria for hedge accounting, hedge accounting is discontinued.
Voluntary discontinuation of hedge accounting is not permitted under IFRS 9.
Fair value hedges of interest rate risk related to debt instruments and loan assets
The fair value change of the hedged item attributable to a hedged risk is recognized as an adjustment to the carrying
amount of a hedged item measured at amortized cost and is already reflected in the measurement of a hedged item
measured at FVOCI, with such changes recognized in the income statement (as opposed to
Other comprehensive income
for a hedged item measured at FVOCI) along with the change in the fair value of the hedging instrument.
Fair value hedges of FX risk related to debt instruments
The fair value change of the hedged item attributable to the hedged risk is reflected in the measurement of the hedged
item and recognized in the income statement along with the change in the fair value of the hedging instrument. The
foreign currency basis spread of cross-currency swaps designated as hedging derivatives is excluded from the designation
and accounted for as a cost of hedging with amounts deferred in
Other comprehensive income
Equity
. These
amounts are released to the income statement over the term of the hedged item.
Discontinuation of fair value hedges
When fair value hedges are discontinued for reasons other than derecognition of the hedged item, the effective interest
rate of the hedged item is adjusted to amortize the fair value of the hedge risk at the point of discontinuation through
the income statement over the remaining life of the hedged item. If the hedged item is derecognized, the derecognition
gain or loss includes the impact of any fair value hedge adjustments. The deferred cost of hedging amount is reclassified
from
Other comprehensive income
Equity
derecognized.
Cash flow hedges of forecast transactions
Fair value gains or losses associated with the effective portion of derivatives designated as cash flow hedges for cash flow
repricing risk are recognized initially in
Other comprehensive income
Equity
Interest income
from financial instruments measured at amortized cost and fair value through other comprehensive income
Interest
expense from financial instruments measured at amortized cost
affect profit or loss, including discontinued hedges for which forecast cash flows are expected to occur. If the forecast
transactions are no longer expected to occur, the deferred gains or losses are immediately reclassified to the income
statement.
Hedges of net investments in foreign operations
Gains or losses on the hedging instrument relating to the effective portion of a hedge are recognized directly in
Other
comprehensive income
Equity
, while any gains or losses relating to the ineffective and / or undesignated portion
(for example, the interest element of a forward contract) are recognized in the income statement. Upon disposal or partial
disposal of the foreign operation, the cumulative value of any such gains or losses recognized in
Equity
the entity
is reclassified to
Other income
.
›
Refer to Note 24 for more information
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Note 1 Summary of material accounting policies (continued)
3) Fee and commission income and expenses
UBS AG earns fee income from the diverse range of services it provides to its clients. Fee income can be divided into two
broad categories: fees earned from services that are provided over a certain period of time, such as management of
clients’ assets, custody services and certain advisory services; and fees earned from PIT services, such as underwriting fees,
deal-contingent merger and acquisitions fees, and brokerage fees (e.g. securities and derivatives execution and clearing).
UBS AG recognizes fees earned from PIT services when it has fully provided the service to the client. Where the contract
requires services to be provided over time, income is recognized on a systematic basis over the life of the agreement.
This
includes fees related to loan commitments where it is not probable that a specific lending arrangement will be entered
into, which are recognized over the life of the commitment.
Consideration received is allocated to the separately identifiable performance obligations in a contract. Owing to the
nature of UBS AG’s business, contracts that include multiple performance obligations are typically those that are
considered to include a series of similar performance obligations fulfilled over time with the same pattern of transfer to
the client, e.g. management of client assets and custodial services. As a consequence, UBS AG is not required to apply
significant judgment in allocating the consideration received across the various performance obligations.
PIT services are generally for a fixed price or dependent on deal size, e.g. a fixed number of basis points of trade size,
where the amount of revenue is known when the performance obligation is met. Fixed-over-time fees are recognized on
a straight-line basis over the performance period. Custodial and asset management fees can be variable through reference
to the size of the customer portfolio. However, they are generally billed on a monthly or quarterly basis once the
customer’s portfolio size is known or known with near certainty and therefore also recognized ratably over the
performance period. UBS AG does not recognize performance fees related to management of clients’ assets or fees
related to contingencies beyond UBS AG’s control until such uncertainties are resolved.
UBS AG’s fees are generally earned from short-term contracts. As a result, UBS AG’s contracts do not include a financing
component or result in the recognition of significant receivables or prepayment assets. Furthermore, due to the short-
term nature of such contracts, UBS AG has not capitalized any material costs to obtain or fulfill a contract or generated
any significant contract assets or liabilities.
UBS AG presents expenses primarily in line with their nature in the income statement, differentiating between expenses
that are directly attributable to the satisfaction of specific performance obligations associated with the generation of
revenues, which are generally presented within
Total revenues
Fee and commission expense
, and those that are related
to personnel, general and administrative expenses, or depreciation and amortization which are presented within
Operating expenses
. For derivatives execution and clearing services (where UBS AG acts as an agent), UBS AG only
recognizes its specific fees in the income statement, with fees payable to other parties not recognized as an expense but
instead directly offset against the associated income collected from the given client.
›
Refer to Note 4 for more information, including the disaggregation of revenues
4) Share-based and other deferred compensation plans
UBS AG recognizes expenses for deferred compensation awards over the period that the employee is required to provide
service to become entitled to the award. Where the service period is shortened, for example in the case of employees
affected by restructuring programs or mutually agreed termination provisions, recognition of such expense is accelerated
to the termination date. Where no future service is required, such as for employees who are eligible for retirement or
who have met certain age and length-of-service criteria, the services are presumed to have been received and
compensation expense is recognized over the performance year or, in the case of off -cycle awards, immediately on the
grant date.
Share-based compensation plans
UBS Group AG is the grantor of and maintains the obligation to settle share-based compensation plans that are awarded
to employees of UBS AG. As a consequence, UBS AG classifies the awards of UBS Group AG shares as equity-settled
share-based payment transactions. UBS AG recognizes the fair value of awards granted to its employees by reference to
the fair value of UBS Group AG’s equity instruments on the date of grant, taking into account the terms and conditions
inherent in the award, including, where relevant, dividend rights, transfer restrictions in effect beyond the vesting date,
market conditions, and non-vesting conditions.
For equity-settled awards, fair value is not remeasured unless the terms of the award are modified such that there is an
incremental increase in value. Expenses are recognized, on a per-tranche basis, over the service period based on an
estimate of the number of instruments expected to vest and are adjusted to reflect the actual outcomes of service or
performance conditions.
For equity-settled awards, forfeiture events resulting from a breach of a non-vesting condition (i.e. one that does not
relate to a service or performance condition) do not result in any adjustment to the share-based compensation expense.
For cash-settled share-based awards, fair value is remeasured at each reporting date, so that the cumulative expense
recognized equals the cash distributed.
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Note 1 Summary of material accounting policies (continued)
Other deferred compensation plans
Compensation expense for other deferred compensation plans is recognized on a per-tranche or straight-line basis,
depending on the nature of the plan. The amount recognized is measured based on the present value of the amount
expected to be paid under the plan and is remeasured at each reporting date, so that the cumulative expense recognized
equals the cash or the fair value of respective financial instruments distributed.
›
Refer to Note 26 for more information
5) Post-employment benefit plans
Defined benefit plans
Defined benefit plans specify an amount of benefit that an employee will receive, which usually depends on one or more
factors, such as age, years of service and compensation. The defined benefit liability recognized in the balance sheet is
the present value of the defined benefit obligation, measured using the projected unit credit method, less the fair value
of the plan’s assets at the balance sheet date, with changes resulting from remeasurements recorded immediately in
Other comprehensive income
. If the fair value of the plan’s assets is higher than the present value of the defined benefit
obligation, the recognition of the resulting net asset is limited to the present value of economic benefits available in the
form of refunds from the plan or reductions in future contributions to the plan. Calculation of the net defined benefit
obligation or asset takes into account the specific features of each plan, including risk sharing between employee and
employer, and is calculated periodically by independent qualified actuaries.
Defined contribution plans
A defined contribution plan pays fixed contributions into a separate entity from which post-employment and other
benefits are paid. UBS AG has no legal or constructive obligation to pay further amounts if the plan does not hold
sufficient assets to pay employees the benefits relating to employee service in the current and prior periods.
Compensation expense is recognized when the employees have rendered services in exchange for contributions. This is
generally in the year of contribution. Prepaid contributions are recognized as an asset to the extent that a cash refund or
a reduction in future payments is available.
›
Refer
to Note 25 for more information
6) Income taxes
UBS AG is subject to the income tax laws of Switzerland and those of the non-Swiss jurisdictions in which UBS AG has
business operations.
UBS AG’s provision for income taxes is composed of current and deferred taxes. Current income taxes represent taxes to
be paid or refunded for the current period or previous periods.
Deferred tax assets (DTAs) and deferred tax liabilities (DTLs) are recognized for temporary differences between the carrying
amounts and tax bases of assets and liabilities that will result in deductible or taxable amounts, respectively in future
periods. DTAs may also arise from other sources, including unused tax losses and unused tax credits. DTAs and DTLs are
measured using the applicable tax rates and laws that have been enacted or substantively enacted by the end of the
reporting period and that will be in effect when such differences are expected to reverse.
DTAs are recognized only to the extent it is probable that sufficient taxable profits will be available against which these
differences can be used. When an entity or tax group has a history of recent losses, DTAs are only recognized to the
extent that there are sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable
profit will be available against which the unused tax losses can be utilized.
Deferred and current tax assets and liabilities are offset when: (i) they arise in the same tax reporting group; (ii) they relate
to the same tax authority; (iii) the legal right to offset exists; and (iv) with respect to current taxes they are intended to
be settled net or realized simultaneously.
Current and deferred taxes are recognized as income tax benefit or expense in the income statement, except for current
and deferred taxes recognized in relation to: (i) the acquisition of a subsidiary (for which such amounts would affect the
amount of goodwill arising from the acquisition); (ii) unrealized gains or losses on financial instruments that are classified
at FVOCI; (iii) changes in fair value of derivative instruments designated as cash flow hedges; (iv) remeasurements of
defined benefit plans; or (v) certain foreign currency translations of foreign operations. Amounts relating to points (ii)
through (v) above are recognized in
Other comprehensive income
Equity
.
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Note 1 Summary of material accounting policies (continued)
UBS AG reflects the potential effect of uncertain tax positions for which acceptance by the relevant tax authority is not
considered probable by adjusting current or deferred taxes, as applicable, using either the most likely amount or expected
value methods, depending on which method is deemed a better predictor of the basis on which, and extent to which,
the uncertainty will be resolved.
Critical accounting estimates and judgments
Tax laws are complex, and judgment and interpretations about the application of such laws are required when accounting for income taxes. UBS AG considers
the performance of its businesses and the accuracy of historical forecasts and other factors when evaluating the recoverability of its DTAs, including the
remaining tax loss carry-forward period, and its assessment of expected future taxable profits in the forecast period used for recognizing DTAs. Estimating
future profitability and business plan forecasts is inherently subjective and is particularly sensitive to future economic, market and other conditions.
Forecasts are reviewed annually, but adjustments may be made at other times, if required. If recent losses have been incurred, convincing evidence is
required to prove there is sufficient future profitability given that the value of UBS AG’s DTAs may be affected, with effects primarily recognized through the
income statement.
In addition, judgment is required to assess the expected value of uncertain tax positions and the related probabilities, including interpretation of tax laws,
the resolution of any income-tax-related appeals and litigation.
›
Refer to Note 8 for more information
7) Investments in associates
Interests in entities where UBS AG has significant influence over the financial and operating policies of these entities but
does not have control are classified as investments in associates and are accounted for under the equity method of
accounting. Typically, UBS AG has significant influence when it holds, or has the ability to hold, between 20% and 50%
of an entity’s voting rights. Investments in associates are initially recognized at cost, and the carrying amount is increased
or decreased after the date of acquisition to recognize UBS AG’s share of the investee’s comprehensive income and
dividends received and adjusted for any impairment losses. The net investment in an associate is impaired if there is
objective evidence of a loss event and the carrying amount of the investment in the associate exceeds its recoverable
amount.
›
Refer to Note 27 for more information
8) Property, equipment and software
Property, equipment and software
development costs are capitalized only when the costs can be measured reliably and it is probable that future economic
benefits will arise. Depreciation of property, equipment and software begins when they are available for use and is
calculated on a straight-line basis over an asset’s estimated useful life.
Property, equipment and software are generally tested for impairment at the appropriate cash-generating unit level,
alongside goodwill and intangible assets as described in item 9 in this Note. An impairment charge is recognized for such
assets if the recoverable amount is below its carrying amount. The recoverable amounts of such assets, other than
property that has a market price, are generally determined using a replacement cost approach that reflects the amount
that would be currently required by a market participant to replace the service capacity of the asset. If such assets are no
longer used, they are tested individually for impairment.
›
Refer to Note 11 for more information
9) Goodwill and other separately identifiable intangible assets
Goodwill represents the excess of the consideration over the fair value of identifiable assets, liabilities and contingent
liabilities acquired that arises in a business combination. Goodwill is not amortized but is assessed for impairment at the end
of each reporting period, or when indicators of impairment exist. UBS AG tests goodwill for impairment annually, irrespective
of whether there is any indication of impairment. An impairment charge is recognized in the income statement if the carrying
amount exceeds the recoverable amount of a cash-generating unit.
Business combinations under common control do not result in recognition of goodwill or other intangible assets incremental
to those already recognized by the acquired entity prior to the date of transfer. Goodwill assumed is subsequently allocated
to respective cash-generating units and tested for impairment.
An impairment charge is recognized in the income statement if the carrying amount exceeds the recoverable amount of a
cash-generating unit.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 161
Note 1 Summary of material accounting policies (continued)
Critical accounting estimates and judgments
UBS AG‘s methodology for goodwill impairment testing is based on a model that is most sensitive to the following key assumptions: (i) forecasts of earnings
available to shareholders (typically estimated on a discrete basis for years one to three); (ii) changes in the discount rates; and (iii) changes in the long-term
growth rate.
Earnings available to shareholders are estimated on the basis of forecast results, which are part of the business plan approved by the BoD. The discount
rates and growth rates are determined using external information, and also considering inputs from both internal and external analysts and the view of
management.
The key assumptions used to determine the recoverable amounts of each cash-generating unit are tested for sensitivity by applying reasonably possible
changes to those assumptions.
›
Refer to Notes 2 and 12 for more information
10) Provisions and contingent liabilities
Provisions are liabilities of uncertain timing or amount, and are generally recognized in accordance with IAS 37,
Provisions,
Contingent Liabilities and Contingent Assets
, when: (i) UBS AG has a present obligation as a result of a past event; (ii) it
is probable that an outflow of resources will be required to settle the obligation; and (iii) a reliable estimate of the amount
of the obligation can be made. IAS 37 provisions are measured considering the best estimate of the consideration required
to settle the present obligation at the balance sheet date.
When conditions required to recognize a provision are not met, a contingent liability is disclosed, unless the likelihood of
an outflow of resources is remote. Contingent liabilities are also disclosed for possible obligations that arise from past
events, the existence of which will be confirmed only by uncertain future events not wholly within the control of UBS AG.
Critical accounting estimates and judgments
Recognition of provisions often involves significant judgment in assessing the existence of an obligation that results from past events and in estimating the
probability, the timing and the amount of any outflows of resources. This is particularly the case for litigation, regulatory and similar matters, which, due to
their nature, are subject to many uncertainties, making their outcome difficult to predict.
The amount of any provision recognized is sensitive to the assumptions used, and there could be a wide range of possible outcomes for any particular
matter.
Management regularly reviews all the available information regarding such matters, including legal advice, to assess whether the recognition criteria for
provisions have been satisfied and to determine the timing and the amount of any potential outflows.
›
Refer to Note 17 for more information
11) Foreign currency translation
Transactions denominated in a foreign currency are translated into the functional currency of the reporting entity at the
spot exchange rate on the date of the transaction. At the balance sheet date, all monetary assets, including those at
FVOCI, and monetary liabilities denominated in foreign currency are translated into the functional currency using the
closing exchange rate. Translation differences are reported in
Other net income from financial instruments measured at
fair value through profit or loss
.
Non-monetary items measured at historical cost are translated at the exchange rate on the date of the transaction.
Upon consolidation, assets and liabilities of foreign operations are translated into US dollars, UBS AG’s presentation currency,
at the closing exchange rate on the balance sheet date, and income and expense items and other comprehensive income
are translated at the average rate for the period. The resulting foreign currency translation differences are recognized in
Equity
entirety, and UBS AG no longer controls the foreign operation.
Share capital issued and share premium held are translated at the historic average rate, with the difference between the
historic average rate and the spot rate realized upon repayment of share capital reported as
Share premium.
amounts recognized in
Other comprehensive income
are translated at the closing exchange rate as of the balance sheet dates, with any translation effects adjusted through
Retained earnings
.
›
Refer to Note 31 for more information
12) Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents consist of balances with an original maturity
of three months or less including cash, money market paper and balances with central and other banks.
In certain circumstances cash and cash equivalent balances held are not available for the use by UBS AG, for example
amounts placed at central banks to meet local statutory minimum reserve requirements, balances protected under client
asset segregation rules and balances pledged under depositor protection schemes.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 162
Note 1 Summary of material accounting policies (continued)
b) Changes in IFRS Accounting Standards and Interpretations
Disclosures about Uncertainties in the Financial statements
In November 2025, the IASB issued illustrative examples
Disclosures about Uncertainties in the Financial Statements,
climate-related examples to illustrate how requirements in IFRS Accounting Standards are applied to report the effects of
uncertainties in the financial statements. Examples have no stated effective date. The guidance provided through these
examples is consistent with the manner in which UBS AG prepares its financial statements.
IFRS 18,
Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued a new standard, IFRS 18,
Presentation and Disclosure in Financial Statements,
replaces IAS 1,
Presentation of Financial Statements
. The main changes introduced by IFRS 18 relate to:
–
the structure of income statements;
–
new disclosure requirements for management performance measures; and
–
enhanced guidance on aggregation and disaggregation of information on the face of financial statements and in the
notes thereto.
IFRS 18 is effective from 1 January 2027 and will also apply to comparative information. UBS AG will apply these new
requirements from 1 January 2027. UBS AG is assessing the impact of the new requirements on its reporting but expects
it to be limited. UBS AG will evaluate the grouping of items in the primary financial statements and in the notes thereto
based on new principles of aggregation and disaggregation in IFRS 18.
Amendments to IFRS 9,
Financial Instruments
, and IFRS 7,
Financial Instruments: Disclosures
In May 2024, the IASB issued
Amendments to the Classification and Measurement of Financial Instruments –
Amendments to IFRS 9 and IFRS 7
The Amendments relate to:
–
assessment of contractual cash flow characteristics in classifying financial assets, including those with environmental,
social and corporate governance and similar features, non-recourse features, and contractually linked instruments;
–
derecognition of financial instruments, including the introduction of an accounting policy election to derecognize
financial liabilities settled through electronic transfer systems, if certain conditions are met; and
–
disclosure of information about financial instruments with contingent features that can change the amount of
contractual cash flows, as well as equity instruments designated at fair value through other comprehensive income.
The Amendments are effective from 1 January 2026 and are expected to have limited impact on UBS AG’s financial
statements.
Other amendments to IFRS Accounting Standards
The IASB has issued a number of minor amendments to IFRS Accounting Standards, effective from 1 January 2025 and
later. These amendments do not have or are not expected to have a significant effect on UBS AG when they are adopted.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 163
Note 2a Segment reporting
UBS AG’s businesses are organized globally into five business divisions: Global Wealth Management, Personal &
Corporate Banking, Asset Management, the Investment Bank, and Non-core and Legacy. All five business divisions are
supported by the Group functions and qualify as reportable segments for the purpose of segment reporting. Together
with the Group functions, the five business divisions reflect the management structure of UBS AG.
–
Global Wealth Management
select institutional clients. Its offering ranges from investment management to estate planning and corporate finance
advice, in addition to specific wealth management and banking products and services.
–
Personal & Corporate Banking
retirement, financing, investments and strategic transactions, to private, corporate and institutional clients, in
Switzerland, through its branch network and digital channels.
–
Asset Management
strategies across all major traditional and alternative asset classes and investing styles to institutions, wholesale
intermediaries and Global Wealth Management clients.
–
The
Investment Bank
clients, helping them raise capital, invest and manage risks. Its offering includes equities, foreign exchange, precious
metals, research, advisory and capital markets, complemented by a focused rates and credit platform.
–
Non-core and Legacy
not aligned with UBS AG’s long-term strategic priorities or risk appetite, including associated financial and non-
financial assets, operating expenses, and funding costs. A small part of the division is made up of positions from UBS’s
former Non-core and Legacy Portfolio and some other legacy UBS assets and liabilities that were assessed as non-
strategic in the context of the acquisition of the Credit Suisse Group.
–
The Group functions are support and control functions that provide services to the Group. Virtually all costs incurred
by the Group functions are allocated to the business divisions, leaving a residual amount referred to as
Group Items
in the segment reporting. Group functions include the following major areas: Group Services (which consists of Group
Technology, Group Compliance and Operational Risk Control, Group Finance, Group Risk Control, Group Human
Resources and Corporate Services, Group Corporate Communications and Group Brand & Marketing, Group Legal,
the Group Integration Office, Group Sustainability and Impact, and the Chief Strategy Office) and Group Treasury.
Financial information about the five business divisions and Group Items is presented separately in internal management
reports to the Executive Board, which is considered the “chief operating decision-maker” pursuant to IFRS 8,
Operating
Segments
.
UBS AG’s internal accounting policies, which include management accounting policies and service-level agreements,
determine the revenues and expenses directly attributable to each reportable segment. Transactions between the
reportable segments are carried out at internally agreed rates and are reflected in the operating results of the reportable
segments. Revenue-sharing agreements are used to allocate external client revenues to reportable segments where
several reportable segments are involved in the value creation chain. Total intersegment revenues for UBS AG are
immaterial, as the majority of the revenues are allocated across the segments by means of revenue-sharing agreements.
Interest income earned from managing UBS AG’s consolidated equity is allocated to the reportable segments based on
average attributed equity and currency composition. Assets and liabilities of the reportable segments are funded through
and invested with Group functions, and the net interest margin is reflected in the results of each reportable segment.
Segment assets are based on a third-party view and do not include intercompany balances. This view is in line with
internal reporting to management. If one operating segment is involved in an external transaction together with another
operating segment or Group function, additional criteria are considered to determine the segment that will report the
associated assets. This will include a consideration of which segment’s business needs are being addressed by the
transaction and which segment is providing the funding and / or resources. Allocation of liabilities follows the same
principles.
Non-current assets disclosed for segment reporting purposes represent assets that are expected to be recovered more
than 12 months after the reporting date, excluding financial instruments, deferred tax assets and post-employment
benefits.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 164
Note 2a Segment reporting (continued)
Segment reporting
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
UBS AG
For the year ended 31 December 2025
Net interest income
(70 )
(2,927 )
(248 )
(1,459 )
Non-interest income
Total revenues
(128 )
(928 )
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
(3,003 )
(2,171 )
Tax expense / (benefit)
Net profit / (loss)
Additional information
Total assets
Additions to non-current assets
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
UBS AG
For the year ended 31 December 2024
Net interest income
(54 )
(3,484 )
(12 )
(1,708 )
Non-interest income
Total revenues
Credit loss expense / (release)
(1 )
Operating expenses
Operating profit / (loss) before tax
(3,392 )
(935 )
Tax expense / (benefit)
Net profit / (loss)
Additional information
Total assets
Additions to non-current assets
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
UBS AG
For the year ended 31 December 2023
Net interest income
(37 )
(2,586 )
(1,238 )
Non-interest income
Total revenues
Credit loss expense / (release)
(1 )
Operating expenses
Operating profit / (loss) before tax
(952 )
(914 )
Tax expense / (benefit)
Net profit / (loss)
Additional information
Total assets
Additions to non-current assets
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 165
Note 2b Segment reporting by geographic location
The operating regions shown in the table below correspond to the regional management structure of UBS AG. The
allocation of total revenues to these regions reflects, and is consistent with, the basis on which the business is managed
and its performance is evaluated. These allocations involve assumptions and judgments that management considers to
be reasonable and may be refined to reflect changes in estimates or management structure. The main principles of the
allocation methodology are that client revenues are attributed to the domicile of the given client and trading and portfolio
management revenues are attributed to the country where the risk is managed. This revenue attribution is consistent
with the mandate of the regional Presidents. Certain revenues, such as those related to Non-core and Legacy and Group
Items, are included in the
Global
The geographical analysis of non-current assets is based on the location of the entity in which the given assets are
recorded.
Segment reporting by geographic location
For the year ended 31 December 2025
Total revenues
Total non-current assets
USD bn
Share %
USD bn
Share %
Americas
1
Asia Pacific
EMEA (excluding Switzerland)
Switzerland
Global
2
(0.9 )
(2 )
Total
For the year ended 31 December 2024
Total revenues
Total non-current assets
USD bn
Share %
USD bn
Share %
Americas
1
Asia Pacific
EMEA (excluding Switzerland)
Switzerland
Global
3
Total
For the year ended 31 December 2023
Total revenues
Total non-current assets
USD bn
Share %
USD bn
Share %
Americas
1
Asia Pacific
EMEA (excluding Switzerland)
Switzerland
Global
Total
1 Predominantly related to the US. 2 Includes certain revenues in Global Wealth Management that were not allocated to geographical regions. 3 Includes certain revenues in Asset Management and Global Wealth
Management that were not allocated to geographical regions.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 166
Income statement notes
Note 3 Net interest income and other net income from financial instruments measured at fair value through
profit or loss
Net interest income and Other net income from financial instruments measured at fair value through profit or loss
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Net interest income from financial instruments measured at fair value through profit or loss and other
Other net income from financial instruments measured at fair value through profit or loss
1
Total net income from financial instruments measured at fair value through profit or loss and other
Net interest income
Interest income from loans and deposits
2
Interest income from securities financing transactions measured at amortized cost
3
Interest income from other financial instruments measured at amortized cost
Interest income from debt instruments measured at fair value through other comprehensive income
Interest resulting from derivative instruments designated as cash flow hedges
(1,229 )
(1,943 )
(1,898 )
Total interest income from financial instruments measured at amortized cost and fair value through other comprehensive income
Interest expense on loans and deposits
4
Interest expense on securities financing transactions measured at amortized cost
5
Interest expense on debt issued and funding from UBS Group AG measured at amortized cost
6
Interest expense on lease liabilities
Total interest expense from financial instruments measured at amortized cost
Total net interest income from financial instruments measured at amortized cost and fair value through other comprehensive income
(777 )
Total net interest income from financial instruments measured at fair value through profit or loss and other
Total net interest income
1 Includes net losses from financial liabilities designated at fair value of USD
m (net losses of USD
m in 2024 and net losses of USD
m in 2023). These amounts exclude fair value changes on hedges
related to financial liabilities designated at fair value, and foreign currency translation effects arising from translating foreign currency transactions into the respective functional currency, both of which are reported
within Other net income from financial instruments measured at fair value through profit or loss. Net losses from financial liabilities designated at fair value included net losses of USD
m (net losses of USD
m
and net losses of USD
m in 2024 and 2023, respectively) from financial liabilities related to unit-linked investment notes issued by UBS AG’s Asset Management business division. These gains / (losses) are fully
offset within Other net income from financial instruments measured at fair value through profit or loss by the fair value change on the financial assets hedging the unit-linked investment contracts, which are not
disclosed as part of net losses from financial liabilities designated at fair value. 2 Consists of interest income from cash and balances at central banks, amounts due from banks and customers, and cash collateral
receivables on derivative instruments, as well as negative interest on amounts due to banks, customer deposits, and cash collateral payables on derivative instruments. 3 Includes negative interest, including fees,
on payables from securities financing transactions measured at amortized cost. 4 Consists of interest expense on amounts due to banks, cash collateral payables on derivative instruments, customer deposits, and
funding from UBS Group AG measured at amortized cost, as well as negative interest on cash and balances at central banks, amounts due from banks, and cash collateral receivables on derivative instruments.
5 Includes negative interest, including fees, on receivables from securities financing transactions measured at amortized cost. 6 Includes interest expense on funding from UBS Group AG measured at amortized cost,
previously presented in Interest expense on loans and deposits. Comparative-period information has been revised, which resulted in a USD
bn reclassification from Interest expense on loans and deposits to Interest
expense on debt issued and funding from UBS Group AG measured at amortized cost for the year ended 31 December 2024 and USD
bn for the year ended 31 December 2023.
Note 4 Net fee and commission income
Net fee and commission income
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Underwriting fees
M&A and corporate finance fees
Brokerage fees
Portfolio management, investment fund and related services fees
1
Other
Total fee and commission income
2
of which: recurring
of which: transaction-based
of which: performance-based
Fee and commission expense
3
Net fee and commission income
of which: recurring net fee and commission income
of which: Global Wealth Management
of which: Personal & Corporate Banking
of which: Asset Management
of which: transaction-based net fee and commission income
of which: Global Wealth Management
of which: Personal & Corporate Banking
of which: Asset Management
of which: performance-based net fee and commission income
of which: Asset Management
1 Fees for portfolio management and related services and investment fund fees are presented on a combined basis. Comparative-period information has been aligned with the information presented for the year ended
31 December 2025. This category includes fees earned on portfolio management mandates with clients and management and performance fees earned on UBS-managed funds and third-party-managed funds. 2 For
the year ended 31 December 2025 reflects third-party fee and commission income of USD
m for Global Wealth Management, USD
m for Personal & Corporate Banking, USD
m for Asset Management,
USD
m for the Investment Bank, USD
m for Non-core and Legacy, and negative USD
m for Group Items (for the year ended 31 December 2024: USD
m for Global Wealth Management, USD
m
for Personal & Corporate Banking, USD
m for Asset Management, USD
m for the Investment Bank, USD
m for Non-core and Legacy, and negative USD
m for Group Items; for the year
ended 31 December 2023: USD
m for Global Wealth Management, USD
m for Personal & Corporate Banking, USD
m for Asset Management, USD
m for the Investment Bank, USD
m for
Non-core and Legacy, and negative USD
m for Group Items). 3 Includes brokerage expense for the year ended 31 December 2025 of USD
m (for year ended 31 December 2024: USD
m; for the year
ended 31 December 2023: USD
m).
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 167
Note 5
Other income
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Associates, joint ventures and subsidiaries
Net gains / (losses) from acquisitions and disposals of subsidiaries
1
2
Net gains / (losses) from disposals of investments in associates and joint ventures
Share of net profits of associates and joint ventures
3
(163 )
Impairments related to associates
(2 )
Total
(138 )
Net gains / (losses) from disposals of financial assets measured at fair value through other comprehensive income
(1 )
Income from properties
4
Net gains / (losses) from properties held for sale
(11 )
(16 )
Income from shared services provided to UBS Group AG or its subsidiaries
Other
5
(968 )
6
7
Total other income
(17 )
1 Includes foreign exchange gains / (losses) reclassified from other comprehensive income related to the disposal or closure of foreign operations. Refer to Note 28 for more information about UBS AG’s acquisitions
and disposals of subsidiaries and businesses. 2 Includes a gain of USD
m from the sale of a stake in a subsidiary, Credit Suisse Securities (China) Limited, and also includes a loss of USD
m recognized upon
the completion of the sale of the US mortgage servicing business of Credit Suisse, Select Portfolio Servicing, which was managed in Non-core and Legacy. Refer to Note 28 for more information. 3 Includes a gain
of USD
m related to UBS AG’s share of the income recorded by Swisscard AECS GmbH for the sale of the Credit Suisse card portfolios to UBS AG. Refer to Note 28 for more information. 4 Includes rent received
from third parties. 5 Included in 2025 are net losses of USD
m related to the repurchase of UBS AG's own debt instruments (compared with net gains of USD
m in 2024 and net gains of USD
m in 2023).
The net losses in 2025 include a USD
m loss from the repurchase of legacy Credit Suisse debt instruments, as the repurchase price exceeded the amortized-cost carrying value. The debt repurchased included
instruments issued directly by UBS AG through its Stamford branch and instruments on-lent from UBS Group AG. 6 Includes a USD
m gain from the sale of UBS AG’s wealth management business in India. Refer
to Note 28 for more information. 7 Includes USD
m net gains in Asset Management from the sale of the Brazilian real estate fund management business.
Note 6 Personnel expenses
Personnel expenses
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Salaries
1
Variable compensation
2
of which: performance awards
of which: financial advisors
3
of which: other
Contractors
Social security
Post-employment benefit plans
4
of which: defined benefit plans
of which: defined contribution plans
Other personnel expenses
Total personnel expenses
1 Includes role-based allowances. 2 Refer to Note 26 for more information. 3 Financial advisor compensation consists of cash compensation, determined using a formulaic approach based on production, and
deferred awards. It also includes expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. 4 Refer to Note 25 for more
information. Includes curtailment gains of USD
m for the year ended 31 December 2025 (for the year ended 31 December 2024: USD
m; for the year ended 31 December 2023: USD
m), which represent a
reduction in the defined benefit obligation related to the Swiss pension plans resulting from a decrease in headcount following restructuring activities.
Note 7 General and administrative expenses
General and administrative expenses
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Outsourcing costs
Technology costs
Consulting, legal and audit fees
Real estate and logistics costs
Market data services
Marketing and communication
Travel and entertainment
Litigation, regulatory and similar matters
1
Other
2
of which: shared services costs charged by UBS Group AG or its subsidiaries
Total general and administrative expenses
1 Reflects the net increase / (decrease) in provisions for litigation, regulatory and similar matters recognized in the income statement, as well as litigation expenses relating to matters where UBS AG or its subsidiaries
do not hold the provision but have agreed to bear all or a portion of the expense. Refer to Note 17 for more information. In 2024, in accordance with the applicable contractual arrangements, UBS AG received a
reimbursement of USD
m from a direct subsidiary of UBS Group AG. 2 Includes a USD
m expense related to the payment to Swisscard AECS GmbH for the sale of the Credit Suisse card portfolios to UBS AG.
Refer to Note 28 for more information.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 168
Note 8 Income taxes
Income taxes
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Tax expense / (benefit)
Swiss
Current
Deferred
(106 )
Total Swiss
Non-Swiss
Current
Deferred
(735 )
(1,000 )
(262 )
Total non-Swiss
(25 )
Total income tax expense / (benefit) recognized in the income statement
Income tax recognized in the income statement
The Swiss current tax expenses related to taxable profits of UBS Switzerland AG and other Swiss entities.
The non-Swiss current tax expenses included USD
m that related to US corporate alternative minimum tax, with an
equivalent deferred tax benefit for deferred tax assets (DTAs) recognized in respect of tax credits carried forward, and
USD
m in respect of other taxable profits of non-Swiss subsidiaries and branches.
The net non-Swiss deferred tax benefit included USD
m related to the aforementioned deferred tax benefit,
USD
m in respect of a net upward revaluation of DTAs, USD
m in respect of an increase in DTAs that resulted
from an increase in the expected value of future tax deductions for deferred compensation awards due to an increase in
the Group’s share price during the year and USD
m in respect of an increase in DTA recognition for UBS AG’s US
branch. These benefits were partly offset by an expense of USD
m that primarily related to the amortization of DTAs
previously recognized in relation to tax losses carried forward and deductible temporary differences.
Income tax expense / (benefit)
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Operating profit / (loss) before tax
of which: Swiss
of which: non-Swiss
Income taxes at Swiss tax rate of
% for 2025,
% for 2024 and
% for 2023
Increase / (decrease) resulting from:
Non-Swiss tax rates differing from Swiss tax rate
(66 )
(43 )
Tax effects of losses not recognized
Previously unrecognized tax losses now utilized
(152 )
(454 )
(401 )
Non-taxable and lower-taxed income
(147 )
(232 )
(165 )
Non-deductible expenses and additional taxable income
Adjustments related to prior years, current tax
(109 )
(35 )
(15 )
Adjustments related to prior years, deferred tax
(10 )
(27 )
Change in deferred tax recognition
(1,303 )
(608 )
(273 )
Adjustments to deferred tax balances arising from changes in tax rates
Other items
Income tax expense / (benefit)
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 169
Note 8 Income taxes (continued)
The components of operating profit before tax, and the differences between income tax expense reflected in the financial
statements and the amounts calculated at the Swiss tax rate, are provided in the table above and explained below.
Component
Description
Non-Swiss tax rates
differing from the
Swiss tax rate
To the extent that UBS AG profits or losses arise outside Switzerland, the applicable local tax rate may differ from the
Swiss tax rate. This item reflects, for such profits, an adjustment from the tax expense that would arise at the Swiss tax
rate to the tax expense that would arise at the applicable local tax rate. Similarly, it reflects, for such losses, an adjustment
from the tax benefit that would arise at the Swiss tax rate to the tax benefit that would arise at the applicable local tax
rate.
Tax effects of losses
not recognized
This item relates to tax losses of entities arising in the year that are not recognized as DTAs and where no tax benefit arises
in relation to those losses. Therefore, the tax benefit calculated by applying the local tax rate to those losses as described
above is reversed.
Previously
unrecognized tax losses
now utilized
This item relates to taxable profits of the year that are offset by tax losses of previous years for which no DTAs were
previously recorded. Consequently, no current tax or deferred tax expense arises in relation to those taxable profits and
the tax expense calculated by applying the local tax rate on those profits is reversed.
Non-taxable and lower-
taxed income
This item relates to tax deductions for the year in respect of permanent differences. These include deductions in respect of
profits that are either not taxable or are taxable at a lower rate of tax than the local tax rate. They also include deductions
made for tax purposes, which are not reflected in the accounts.
Non-deductible
expenses and
additional taxable
income
This item relates to additional taxable income for the year in respect of permanent differences. These include income that
is recognized for tax purposes by an entity but is not included in its profit that is reported in the financial statements, as
well as expenses for the year that are non-deductible (e.g. client entertainment costs are not deductible in certain
locations).
Adjustments related to
prior years, current tax
This item relates to adjustments to current tax expense for prior years (e.g. if the tax payable for a year is agreed with the
tax authorities in an amount that differs from the amount previously reflected in the financial statements).
Adjustments related to
prior years, deferred
tax
This item relates to adjustments to deferred tax positions recognized in prior years (e.g. if a tax loss for a year is fully
recognized and the amount of the tax loss agreed with the tax authorities is expected to differ from the amount previously
recognized as DTAs in the accounts).
Change in deferred tax
recognition
This item relates to changes in DTAs, including changes in DTAs previously recognized resulting from reassessments of
expected future taxable profits. It also includes changes in temporary differences in the year, for which deferred tax is not
recognized.
Adjustments to
deferred tax balances
arising from changes in
tax rates
This item relates to remeasurements of DTAs and liabilities recognized due to changes in tax rates. These have the effect
of changing the future tax saving that is expected from tax losses or deductible tax differences and therefore the amount
of DTAs recognized or, alternatively, changing the tax cost of additional taxable income from taxable temporary
differences and therefore the deferred tax liability.
Other items
Other items include other differences between profits or losses at the local tax rate and the actual local tax expense or
benefit, including movements in provisions for uncertain positions in relation to the current year and other items.
Income tax recognized directly in equity
A net tax expense of USD
m was recognized in
Other comprehensive income
m)
and a net tax benefit of USD
m was recognized in
Share premium
m).
Deferred tax assets and liabilities
UBS AG has gross DTAs, valuation allowances and recognized DTAs related to tax loss carry-forwards and deductible
temporary differences, as well as deferred tax liabilities in respect of taxable temporary differences, as shown in the table
below. The valuation allowances reflect DTAs that were not recognized because, as of the last remeasurement period,
management did not consider it probable that there would be sufficient future taxable profits available to utilize the
related tax loss carry-forwards and deductible temporary differences.
The recognition of DTAs is supported by forecasts of taxable profits for the entities concerned. In addition, tax planning
opportunities are available that would result in additional future taxable income and these would be utilized, if necessary.
Deferred tax liabilities are recognized in respect of investments in subsidiaries, branches and associates, and interests in
joint arrangements, except to the extent that UBS AG can control the timing of the reversal of the associated taxable
temporary difference, and it is probable that such will not reverse in the foreseeable future. However, as of 31 December
2025, this exception was not considered to apply to any taxable temporary differences.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 170
Note 8 Income taxes (continued)
Deferred tax assets and liabilities
USD m
31.12.25
31.12.24
Deferred tax assets
1
Gross
Valuation
allowance
Recognized
Gross
Valuation
allowance
Recognized
Tax loss carry-forwards
(17,655 )
(17,594 )
Unused tax credits
Temporary differences
(2,156 )
(2,594 )
of which: related to real estate costs capitalized for US tax purposes
of which: related to compensation and benefits
(250 )
(503 )
of which: related to cash flow hedges
of which: other
(1,907 )
(2,090 )
Total deferred tax assets
(19,810 )
2
(20,188 )
2
of which: related to the US
of which: related to other locations
Deferred tax liabilities
Total deferred tax liabilities
1 After offset of DTLs, as applicable. 2 As of 31 December 2025, UBS AG recognized DTAs of USD
m (31 December 2024: USD
m) in respect of entities that incurred losses in either 2025 or 2024.
In general, US federal tax losses incurred prior to 31 December 2017 can be carried forward for 20 years. US federal tax
losses incurred after that date can be carried forward indefinitely, although the utilization of such losses is limited to 80%
of the entity’s future year taxable profits. UK tax losses can also be carried forward indefinitely; they can shelter up to
either 25% or 50% of future year taxable profits, depending on when the tax losses arose. The amounts of US tax loss
carry-forwards that are included in the table below are based on their amount for federal tax purposes rather than for
state and local tax purposes.
Unrecognized tax loss carry-forwards
USD m
31.12.25
31.12.24
Within 1 year
From 2 to 5 years
From 6 to 10 years
From 11 to 20 years
No expiry
Total
of which: related to the US
1
of which: related to the UK
of which: related to other locations
1 Related to UBS AG’s US branch.
Pillar Two top-up taxes under Global Anti-Base Erosion rules
Certain countries in which UBS AG operates have enacted legislation implementing the Pillar Two Global Anti-Base
Erosion rules published by the Organisation for Economic Co-operation and Development that introduced domestic top-
up taxes that applied to UBS AG entities during 2025, including Switzerland, which introduced non-domestic top-up
taxes with effect from 1 January 2025, that applies to UBS AG’s worldwide entities.
The exception that was introduced by the amendments to IAS 12, Income Taxes, issued in May 2023, has been applied
for the purposes of these financial statements, which requires that deferred tax assets and deferred tax liabilities be
neither recognized nor disclosed in respect of such top-up taxes.
UBS AG’s profits are primarily generated in countries that have effective tax rates of 15% or more and, as a result, its
current tax expenses for 2025 that related to top-up taxes were only USD
m.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 171
Balance sheet notes
Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement
The tables below provide information about financial instruments and certain credit lines that are subject to expected
credit loss (ECL) requirements. UBS AG’s ECL disclosure segments, or “ECL segments”, are aggregated portfolios based
on shared risk characteristics and on the same or similar rating methods applied. The key segments are presented in the
table below.
›
Refer to Note 19 for more information about expected credit loss measurement
›
Refer to Note 19f for more information about sensitivity
Segment
Segment description
Description of credit risk sensitivity
Business division
Private clients with
mortgages
Lending to private clients secured by
owner-occupied real estate and
personal account overdrafts of those
clients
Sensitive to Swiss GDP, interest rate
environment, unemployment levels, real
estate collateral values and other regional
aspects
–
Personal & Corporate Banking
–
Global Wealth Management
Real estate financing
Rental or income-producing real estate
financing to private and corporate
clients secured by real estate
Sensitive to Swiss GDP, unemployment
levels, the interest rate environment, real
estate collateral values and other regional
aspects
–
Personal & Corporate Banking
–
Global Wealth Management
–
Investment Bank
Large corporate clients
Lending to large corporate and multi-
national clients
Sensitive to GDP developments,
unemployment levels, credit default swap
(CDS) indices, seasonality, business cycles,
collateral values (diverse collateral,
including real estate and other collateral
types) and commodity prices
–
Personal & Corporate Banking
–
Investment Bank
–
Global Wealth Management
–
Non-core and Legacy
SME clients
Lending to small and medium-sized
corporate clients
Sensitive to GDP developments,
unemployment levels, the interest rate
environment and, to some extent,
seasonality, business cycles and collateral
values (diverse collateral, including real
estate and other collateral types)
–
Personal & Corporate Banking
Lombard
Loans secured by pledges of marketable
securities, guarantees and other forms
of collateral
Sensitive to equity and debt markets (e.g.
changes in collateral values)
–
Global Wealth Management
–
Non-core and Legacy
Credit cards
Credit card exposures in Switzerland
and the US
Sensitive to unemployment levels
–
Personal & Corporate Banking
–
Global Wealth Management
Commodity trade
finance
Working capital financing of commodity
traders, generally extended on a self-
liquidating transactional basis
Sensitive primarily to the strength of
individual transaction structures and
collateral values (price volatility of
commodities), as the primary source for
debt service is directly linked to the
shipments financed
–
Personal & Corporate Banking
Consumer financing
Consumer loans and car leasing
Sensitive to unemployment levels
–
Personal & Corporate Banking
Ship financing
Ship financing mainly includes bulk
carriers, oil tankers, containers and
liquefied natural gas carriers
Sensitive to real GDP, earnings of tankers
and earnings of bulk carriers
–
Global Wealth Management
Aircraft financing
Corporate aircraft financing
Sensitive to collateral values
–
Global Wealth Management
Financial intermediaries
and hedge funds
Lending to financial institutions and
pension funds, including exposures to
broker-dealers and clearing houses
Sensitive to GDP development, CDS
indices, the interest rate environment,
price and volatility risks in financial
markets, regulatory and political risk, and
collateral values (diverse collateral,
including real estate and other collateral
types)
–
Personal & Corporate Banking
–
Investment Bank
–
Global Wealth Management
–
Non-core and Legacy
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 172
Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement
(continued)
The tables below provide exposure and ECL allowance and provision information about financial instruments and certain
non-financial instruments that are subject to ECL requirements.
ECL-relevant balance sheet and off-balance sheet positions
USD m
31.12.25
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
(262 )
(262 )
Amounts due from banks
(14 )
(9 )
(5 )
Receivables from securities financing transactions measured at amortized cost
(1 )
(1 )
Cash collateral receivables on derivative instruments
Loans and advances to customers
(3,236 )
(352 )
(271 )
(2,613 )
of which: Private clients with mortgages
(134 )
(44 )
(18 )
(72 )
of which: Real estate financing
(68 )
(26 )
(30 )
(12 )
of which: Large corporate clients
(1,009 )
(117 )
(94 )
(798 )
of which: SME clients
(1,305 )
(80 )
(81 )
(1,144 )
of which: Lombard
(130 )
(6 )
(124 )
of which: Credit cards
(48 )
(7 )
(12 )
(29 )
of which: Commodity trade finance
(136 )
(8 )
(128 )
of which: Ship / aircraft financing
(17 )
(9 )
(8 )
of which: Consumer financing
(167 )
(19 )
(24 )
(123 )
Other financial assets measured at amortized cost
(122 )
(29 )
(9 )
(84 )
of which: Loans to financial advisors
(34 )
(3 )
(1 )
(30 )
Total financial assets measured at amortized cost
(3,635 )
(392 )
(546 )
(2,697 )
Financial assets measured at fair value through other comprehensive income
Total on-balance sheet financial assets in scope of ECL requirements
(3,635 )
(392 )
(546 )
(2,697 )
Notional exposure
ECL provisions
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Guarantees
(50 )
(15 )
(22 )
(13 )
of which: Large corporate clients
(17 )
(7 )
(6 )
(4 )
of which: SME clients
(24 )
(5 )
(15 )
(4 )
of which: Financial intermediaries and hedge funds
(1 )
(1 )
of which: Lombard
(2 )
(1 )
of which: Commodity trade finance
(1 )
(1 )
Irrevocable loan commitments
(227 )
(114 )
(77 )
(36 )
of which: Large corporate clients
(184 )
(91 )
(72 )
(20 )
Forward starting reverse repurchase and securities borrowing agreements
Committed unconditionally revocable credit lines
(67 )
(51 )
(16 )
of which: Real estate financing
(3 )
(5 )
of which: Large corporate clients
(15 )
(7 )
(6 )
(2 )
of which: SME clients
(31 )
(24 )
(7 )
of which: Lombard
of which: Credit cards
(9 )
(7 )
(2 )
Irrevocable committed prolongation of existing loans
(3 )
(3 )
Total off-balance sheet financial instruments and other credit lines
(347 )
(184 )
(115 )
(49 )
Total allowances and provisions
(3,982 )
(575 )
(661 )
(2,746 )
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 173
Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement
(continued)
ECL-relevant balance sheet and off-balance sheet positions
USD m
31.12.24
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
(186 )
(186 )
Amounts due from banks
(42 )
(1 )
(5 )
(36 )
Receivables from securities financing transactions measured at amortized cost
(2 )
(2 )
Cash collateral receivables on derivative instruments
Loans and advances to customers
(2,830 )
(276 )
(323 )
(2,230 )
of which: Private clients with mortgages
(166 )
(46 )
(70 )
(50 )
of which: Real estate financing
(100 )
(24 )
(27 )
(49 )
of which: Large corporate clients
(828 )
(72 )
(123 )
(632 )
of which: SME clients
(963 )
(55 )
(47 )
(860 )
of which: Lombard
(107 )
(6 )
(101 )
of which: Credit cards
(41 )
(6 )
(11 )
(25 )
of which: Commodity trade finance
(122 )
(9 )
(113 )
of which: Ship / aircraft financing
(31 )
(14 )
(16 )
of which: Consumer financing
(137 )
(15 )
(19 )
(102 )
Other financial assets measured at amortized cost
(135 )
(25 )
(7 )
(103 )
of which: Loans to financial advisors
(41 )
(4 )
(1 )
(37 )
Total financial assets measured at amortized cost
(3,195 )
(304 )
(521 )
(2,369 )
Financial assets measured at fair value through other comprehensive income
Total on-balance sheet financial assets in scope of ECL requirements
(3,195 )
(304 )
(521 )
(2,369 )
Notional exposure
ECL provisions
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Guarantees
(61 )
(16 )
(24 )
(22 )
of which: Large corporate clients
(18 )
(6 )
(9 )
(2 )
of which: SME clients
(27 )
(5 )
(15 )
(7 )
of which: Financial intermediaries and hedge funds
(1 )
(1 )
of which: Lombard
(4 )
(1 )
(3 )
of which: Commodity trade finance
(1 )
(1 )
Irrevocable loan commitments
(192 )
(105 )
(61 )
(26 )
of which: Large corporate clients
(155 )
(91 )
(54 )
(10 )
Forward starting reverse repurchase and securities borrowing agreements
Committed unconditionally revocable credit lines
(75 )
(59 )
(17 )
of which: Real estate financing
(6 )
(4 )
(2 )
of which: Large corporate clients
(22 )
(14 )
(7 )
(2 )
of which: SME clients
(34 )
(28 )
(6 )
of which: Lombard
of which: Credit cards
(8 )
(6 )
(2 )
Irrevocable committed prolongation of existing loans
(3 )
(3 )
Total off-balance sheet financial instruments and other credit lines
(332 )
(183 )
(102 )
(48 )
Total allowances and provisions
(3,527 )
(487 )
(623 )
(2,417 )
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 174
Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement
(continued)
Coverage ratios are calculated for the core loan portfolio by taking ECL allowances and provisions divided by the gross
carrying amount of the exposures. Core loan exposure is defined as the sum of
Loans and advances to customers
Loans to financial advisors
.
These ratios are influenced by the following key factors:
–
Lombard loans are generally secured with marketable securities in portfolios that are, as a rule, highly diversified, with
strict lending policies that are intended to ensure that credit risk is minimal under most circumstances;
–
mortgage loans to private clients and real estate financing are controlled by conservative eligibility criteria, including
low loan-to-value ratios and strong debt service capabilities;
–
the amount of unsecured retail lending (including credit cards and consumer financing) is not material;
–
contractual maturities in the loan portfolio, which are a factor in the calculation of ECLs, are generally short, with
Lombard lending typically having average contractual maturities of 12 months or less, real estate lending generally
between two and three years in Switzerland, with long-dated maturities in the US, and corporate lending between
one and two years with related loan commitments up to four years; and
–
write-offs of ECL allowances against the gross loan balances when all or part of a financial asset is deemed uncollectible
or forgiven reduce the coverage ratios.
The total on- and off-balance sheet coverage ratio was
than the ratio as of 31 December 2024. The combined stage 1 and 2 ratio was
with 31 December 2024; the stage 3 ratio was
%,
Coverage ratios for core loan portfolio
31.12.25
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Notional exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the Other financial assets measured at amortized cost balance sheet line. 2 Excludes Forward starting reverse
repurchase and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 175
Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement
(continued)
Coverage ratios for core loan portfolio
31.12.24
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Notional exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the Other financial assets measured at amortized cost balance sheet line. 2 Excludes Forward starting reverse
repurchase and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
Note 10 Derivative instruments
Overview
Over-the-counter (OTC) derivative contracts are usually traded under a standardized International Swaps and Derivatives
Association (ISDA) master agreement or other recognized local industry-standard master agreements between UBS AG
and its counterparties. Terms are negotiated directly with counterparties and the contracts have industry-standard
settlement mechanisms prescribed by ISDA or similar industry-standard solutions. Other OTC derivatives are cleared
through clearing houses, in particular interest rate swaps with London Clearing House (LCH), where a settled-to-market
method has been generally adopted, under which cash collateral exchanged on a daily basis is considered to legally settle
the market value of the derivatives. Regulators in various jurisdictions have introduced rules requiring the payment and
collection of initial and variation margins on certain OTC derivative contracts, which may have a bearing on price and
other relevant terms.
Exchange-traded derivatives (ETD) are standardized in terms of their amounts and settlement dates, and are bought and
sold on regulated exchanges. Exchanges offer the benefits of pricing transparency, standardized daily settlement of
changes in value and, consequently, reduced credit risk.
Most of UBS AG’s derivative transactions relate to sales and market-making activity. Sales activities include the structuring
and marketing of derivative products to customers to enable them to take, transfer, modify or reduce current or expected
risks. Market-making aims to directly support the facilitation and execution of client activity, and involves quoting bid and
offer prices to other market participants with the aim of generating revenues based on spread and volume. UBS AG also
uses various derivative instruments for hedging purposes.
›
Refer to Notes 15 and 20 for more information about derivative instruments
›
Refer to Note 24 for more information about derivatives designated in hedge accounting relationships
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 176
Note 10 Derivative instruments (continued)
Risks of derivative instruments
The derivative financial assets shown on the balance sheet can be an important component of UBS AG’s credit exposure;
however, the positive replacement values related to a respective counterparty are rarely an adequate reflection of
UBS AG’s credit exposure in its derivatives business with that counterparty. This is generally the case because, on the one
hand, replacement values can increase over time (potential future exposure), while, on the other hand, exposure may be
mitigated by entering into master netting agreements and bilateral collateral arrangements. Both the exposure measures
used internally by UBS AG to control credit risk and the capital requirements imposed by regulators reflect these additional
factors.
›
Refer to Note 21 for more information about derivative financial assets and liabilities after consideration of netting potential
permitted under enforceable netting arrangements
›
Refer to the “Risk management and control” section of this report for more information about the risks arising from derivative
instruments
Derivative instruments
31.12.25
31.12.24
USD bn
Derivative
financial
assets
Derivative
financial
liabilities
Notional
amounts
1
Derivative
financial
assets
Derivative
financial
liabilities
Notional
amounts
1
Interest rate
of which: forwards (OTC)
2
of which: swaps (OTC)
of which: options (OTC)
of which: futures (ETD)
Foreign exchange
of which: forwards (OTC)
of which: swaps (OTC)
of which: options (OTC)
Equity / index
of which: swaps (OTC)
of which: options (OTC)
of which: futures (ETD)
of which: options (ETD)
Credit derivatives
Commodities
Other
3
Total derivative instruments, based on netting under IFRS Accounting Standards
4
1 In cases where derivative financial instruments are presented on a net basis on the balance sheet, the respective notional amounts of the netted derivative financial instruments are still presented on a gross basis.
Includes notional amounts related to derivatives that are cleared through either a central counterparty or an exchange and settled on a daily basis. The fair value of these derivatives is presented on the balance sheet
net of the corresponding cash margin under Cash collateral receivables on derivative instruments and Cash collateral payables on derivative instruments and was not material for any of the periods presented. Notional
amounts of client-cleared ETD and OTC transactions through central clearing counterparties are not disclosed, as they have a significantly different risk profile. 2 Includes certain forward starting repurchase and
reverse repurchase agreements that are classified as measured at fair value through profit or loss and are recognized within derivative instruments. 3 Includes mainly derivative loan commitments measured at FVTPL,
as well as unsettled purchases and sales of non-derivative financial instruments for which the changes in the fair value between trade date and settlement date are recognized as derivative financial instruments.
4 Derivative financial assets and liabilities are presented net on the balance sheet if UBS has the unconditional and legally enforceable right to offset the recognized amounts, both in the normal course of business
and in the event of default, bankruptcy or insolvency of the entity and all of the counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Refer to Note 21
for more information about netting arrangements.
On a notional amount basis, approximately
% of OTC interest rate contracts held as of 31 December 2025
(31 December 2024:
%) mature within one year,
% (31 December 2024:
%) within one to five years and
%
(31 December 2024:
%) after five years.
Notional amounts of interest rate contracts cleared through either a central counterparty or an exchange that are legally
settled or economically net settled on a daily basis are presented under
Notional amounts
categorized into maturity buckets on the basis of contractual maturities of the cleared underlying derivative contracts.
Notional amounts related to interest rate contracts increased by USD
trn compared with 31 December 2024, mainly
reflecting higher business volumes in the Investment Bank.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 177
Note 11 Property, equipment and software
At historical cost less accumulated depreciation
USD m
Owned
properties and
equipment
1
Leased
properties and
equipment
2
Software
Projects in
progress
2025
2024
Historical cost
Balance at the beginning of the year
Balance recognized upon the merger of UBS AG and Credit Suisse AG
3
Additions
Disposals / write-offs
4
(1,356 )
(441 )
(433 )
(1 )
(2,231 )
(940 )
Reclassifications
5
(1,504 )
(107 )
(158 )
Foreign currency translation
(955 )
Balance at the end of the year
Accumulated depreciation
Balance at the beginning of the year
Accumulated depreciation recognized upon the merger of UBS AG and
Credit Suisse AG
3
Depreciation
Impairment
6
Disposals / write-offs
4
(1,323 )
(441 )
(433 )
(2,196 )
(937 )
Reclassifications
5
(44 )
(44 )
(40 )
Foreign currency translation
(594 )
Balance at the end of the year
Net book value
Net book value at the beginning of the year
Net book value at the end of the year
7
1 Includes leasehold improvements and IT hardware. 2 Represents right-of-use assets recognized by UBS AG as lessee. UBS AG predominantly enters into lease contracts, or contracts that include lease components,
in relation to real estate, including offices, retail branches and sales offices. The total cash outflow for leases during 2025 was USD
m (2024: USD
m). Interest expense on lease liabilities is included within
Interest expense from financial instruments measured at amortized cost, and lease liabilities are included within Other financial liabilities measured at amortized cost. Refer to Notes 3 and 18a, respectively. There
were no material gains or losses arising from sale-and-leaseback transactions in 2025 and in 2024. 3 Refer to Note 28 for more information about the merger of UBS AG and Credit Suisse AG. 4 Includes write-
offs of fully depreciated assets. 5 The total reclassification amount for the respective periods represents net reclassifications from / to Other non-financial assets. 6 Impairment charges recorded in 2025 generally
relate to assets that are no longer used, of which USD
m for Group Items, USD
m for Global Wealth Management and USD
m for Non-core and Legacy. The recoverable amount based on a value-in-use approach
was determined to be zero. 7 Consists of USD
m related to Owned properties and equipment and USD
m related to Software.
Note 12 Goodwill and intangible assets
Introduction
UBS AG performs an impairment test on its goodwill assets on an annual basis or when indicators of impairment exist.
UBS AG considers Asset Management, as reported in Note 2a, as a separate cash-generating unit (a CGU), as that is the
level at which the performance of investment (and the related goodwill) is reviewed and assessed by management. Given
that a significant amount of goodwill in Global Wealth Management relates to the acquisition of PaineWebber Group,
Inc. in 2000, which mainly affected the Americas portion of the business, this goodwill remains separately monitored by
the Americas, despite the formation of Global Wealth Management in 2018. Therefore, goodwill for Global Wealth
Management is separately considered for impairment at the level of two CGUs: Americas; and Switzerland and
International (consisting of EMEA, Asia Pacific and Global).
The impairment test is performed for each CGU to which goodwill is allocated by comparing the recoverable amount
with the carrying amount of the respective CGU. UBS AG determines the recoverable amount of the respective CGUs
based on their value in use. An impairment charge is recognized if the carrying amount exceeds the recoverable amount.
Upon the merger of UBS AG and Credit Suisse AG in May 2024, an existing goodwill balance of USD
bn in Personal
& Corporate Banking was transferred to UBS AG. This goodwill balance was included in the impairment test as of
31 December 2025 and 31 December 2024.
›
Refer to Note 28 for more information about the merger of UBS AG and Credit Suisse AG
As of 31 December 2025, total goodwill recognized on the balance sheet was USD
bn, of which USD
bn was
carried by the Global Wealth Management Americas CGU, USD
bn was carried by the Global Wealth Management
Switzerland and International CGU, USD
bn was carried by Asset Management and USD
bn was carried by Personal
& Corporate Banking. Based on the impairment testing methodology described below, UBS AG concluded that the
goodwill balances as of 31 December 2025 allocated to these CGUs were not impaired. For each of the CGUs, the
recoverable amount substantially exceeded the carrying value as of 31 December 2025, and there was no indication of
a significant risk of goodwill impairment based on the testing performed as of 31 December 2025.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 178
Note 12 Goodwill and intangible assets (continued)
Methodology for goodwill impairment testing
The recoverable amounts are determined using a discounted cash flow model, which has been adapted to use inputs
that consider features of the banking business and its regulatory environment. The recoverable amount of a CGU is the
sum of the discounted earnings attributable to shareholders from the first three forecast years and the terminal value,
adjusted for the effect of the capital assumed to be needed over the next three years and to support growth beyond that
period. The terminal value, which covers all periods beyond the third year, is calculated on the basis of the forecast of
the third-year profit, the discount rate and the long-term growth rate, as well as the implied perpetual capital growth.
For the Global Wealth Management Americas CGU, the methodology is consistently applied. That CGU’s extended
forecast period of five years (with a terminal value thereafter), which was applied in the 2024 and 2023 goodwill
impairment testing to provide for that CGU’s specific planning assumptions, namely the ongoing investments in the core
banking infrastructure in the US to enhance the product capabilities and offerings in this market, has been reduced to
three years (with a terminal value thereafter) following the implementation of major parts of these planning assumptions.
The extended forecast period of five years did not trigger, defer or avoid an impairment of goodwill as of 31 December
2024 or 31 December 2023.
The carrying amount for each CGU is determined by reference to UBS’s equity attribution framework. Within this
framework, UBS attributes equity to the businesses on the basis of their risk-weighted assets and leverage ratio
denominator (both metrics include resource allocations from Group functions to the business divisions), or by their
common equity tier 1 (CET1) capital equivalent of risk-based capital if higher, their goodwill and their intangible assets,
as well as attributed equity related to certain CET1 capital deduction items. The framework is primarily used for the
purpose of measuring the performance of the businesses and includes certain management assumptions. Attributed
equity is equal to the capital a CGU requires to conduct its business and is currently considered a reasonable
approximation of the carrying amount of the CGUs. The attributed equity methodology is also applied in the business
planning process, the inputs from which are used in calculating the recoverable amounts of the respective CGU.
Assumptions
Valuation parameters used within UBS AG’s impairment test model are linked to external market information, where
applicable. The model used to determine the recoverable amount is most sensitive to changes in the forecast earnings
available to shareholders in years one to three, to changes in the discount rates and to changes in the long-term growth
rate. The applied long-term growth rate is based on long-term economic growth rates for different regions worldwide.
Earnings available to shareholders are estimated on the basis of forecast results, which are part of the business plan
approved by the Board of Directors.
The discount rates are determined by applying a capital asset pricing model-based approach, as well as considering
quantitative and qualitative inputs from both internal and external analysts and the view of management. They also take
into account regional differences in risk-free rates at the level of the individual CGUs. In line with discount rates, long-
term growth rates are determined at the regional level based on nominal GDP growth rate forecasts.
Key assumptions used to determine the recoverable amounts of each CGU are tested for sensitivity by applying a
reasonably possible change to those assumptions. Forecast earnings available to shareholders were changed by
%, the
discount rates were changed by
points. Under all scenarios, reasonably possible changes in key assumptions did not result in an impairment of goodwill
or intangible assets reported by Global Wealth Management Americas, Global Wealth Management Switzerland and
International, and Asset Management.
If the estimated earnings and other assumptions in future periods deviate from the current outlook, the value of goodwill
attributable to Global Wealth Management Americas, Global Wealth Management Switzerland and International, and
Asset Management may become impaired in the future, giving rise to losses in the income statement. Recognition of any
impairment of goodwill would reduce IFRS Accounting Standards equity and net profit. It would not affect cash flows
and, as goodwill is required to be deducted from capital under the Basel III capital framework, no effect would be
expected on UBS AG’s capital ratios.
Discount and growth rates
Discount rates
Growth rates
In %
31.12.25
31.12.24
31.12.25
31.12.24
Global Wealth Management Americas
Global Wealth Management Switzerland and International
Asset Management
Personal & Corporate Banking
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 179
Note 12 Goodwill and intangible assets (continued)
Goodwill and intangible assets
USD m
Goodwill
Intangible
assets
1
2025
2024
Historical cost
Balance at the beginning of the year
Balance recognized upon the merger of UBS AG and Credit Suisse AG
Disposals
2
(2 )
(2 )
(1 )
Reclassifications
3
(384 )
Write-offs
(76 )
(76 )
Foreign currency translation
(113 )
Balance at the end of the year
Accumulated amortization and impairment
Balance at the beginning of the year
Balance recognized upon the merger of UBS AG and Credit Suisse AG
Amortization
Impairment / (reversal of impairment)
Reclassifications
3
(96 )
Write-offs
(76 )
(76 )
Foreign currency translation
(23 )
Balance at the end of the year
Net book value at the end of the year
of which: Global Wealth Management Americas
of which: Global Wealth Management Switzerland and International
of which: Personal & Corporate Banking
of which: Asset Management
of which: Investment Bank
of which: Non-core and Legacy
1 Intangible assets mainly include customer relationships, core deposits, contractual rights and the fully amortized branch network intangible asset recognized in connection with the acquisition of PaineWebber Group,
Inc. in 2000. 2 Reflects the derecognition of goodwill allocated to businesses and intangible assets held by entities that have been disposed of. 3 In 2024, certain intangible assets were reclassified to Assets of
disposal groups held for sale. Refer to Note 28 for more information.
Note 13 Other assets
a) Other financial assets measured at amortized cost
USD m
31.12.25
31.12.24
Debt securities
Loans to financial advisors
Fee- and commission-related receivables
Finance lease receivables
Settlement and clearing accounts
Accrued interest income
Other
1
Total other financial assets measured at amortized cost
1 Predominantly includes cash collateral provided to exchanges and clearing houses to secure securities trading activity through those counterparties.
Effective 1 April 2022, UBS reclassified a portfolio of high-quality liquid financial assets from
Financial assets measured at
fair value through other comprehensive income
bn (the Portfolio) to
Other financial assets
measured at amortized cost
. The Portfolio’s cumulative fair value pre-tax loss of USD
m and post-tax loss of
USD
m, previously recognized in Other comprehensive income, were removed from equity and adjusted against the
value of the assets on the reclassification date, so that the Portfolio was measured as if the assets had always been
classified at amortized cost, with a value of USD
bn as on 1 April 2022. The reclassification has had no effect on the
income statement. At the time, the accounting reclassification arose as a direct result of the planned transformation of
UBS’s Global Wealth Management Americas business, involving significant growth and extension of the business,
generating substantial cash balances, with a number of new saving and deposit products being launched that are longer
in duration. Additional lending, and a broader range of customer segments were targeted. As a consequence, the
Portfolio is no longer held in a business model to collect the contractual cash flows and sell the assets but is instead solely
held to collect the contractual cash flows until the assets mature, requiring a reclassification of the Portfolio in line with
IFRS 9 with effect from 1 April 2022.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 180
Note 13 Other assets (continued)
b) Other non-financial assets
USD m
31.12.25
31.12.24
Precious metals and other physical commodities
Deposits and collateral provided in connection with litigation, regulatory and similar matters
1
Prepaid expenses
Current tax assets
VAT, withholding tax and other tax receivables
Properties and other non-current assets held for sale
2
Assets of disposal groups held for sale
3
Other
Total other non-financial assets
1 Refer to Note 17 for more information. 2 Refer to Note 28 for more information about the agreement to sell Swisscard AECS GmbH. 3 Refer to Note 28 for more information about the sale of Select Portfolio
Servicing.
Note 14 Amounts due to banks, Customer deposits, and Funding from UBS Group AG
a) Amounts due to banks and Customer deposits
USD m
31.12.25
31.12.24
Amounts due to banks
Customer deposits
of which: demand deposits
of which: retail savings / deposits
of which: sweep deposits
of which: time deposits
1
Total amounts due to banks and customer deposits
1 Includes customer deposits in UBS AG Jersey Branch and UBS AG Guernsey Branch placed by UBS Switzerland AG and UBS AG Swiss Branch on behalf of their clients.
Customer deposits increased, mainly reflecting foreign currency effects. This was partly offset by net new deposit
outflows, which mainly reflected maturities of time deposits that resulted in a shift of funds from time deposits into
demand deposits and retail savings / deposits.
b) Funding from UBS Group AG measured at amortized cost
USD m
31.12.25
31.12.24
Debt contributing to total loss-absorbing capacity (TLAC)
Debt eligible as high-trigger loss-absorbing additional tier 1 capital instruments
1
Debt eligible as low-trigger loss-absorbing additional tier 1 capital instruments
Other
2
Total funding from UBS Group AG measured at amortized cost
3,4
1 For 31 December 2025, includes USD
bn (31 December 2024: USD
bn) that is, upon the occurrence of a trigger event or a viability event, subject to conversion into ordinary UBS shares. 2 Includes debt
no longer eligible as TLAC having a residual maturity of less than one year and one debt instrument that ceased to be eligible when UBS Group AG issued a notice of redemption of the instrument in the fourth quarter
of 2025. 3 Total funding from UBS Group AG measured at amortized cost consists of subordinated debt of UBS AG and its subsidiaries toward UBS Group AG. Subordinated debt consists of unsecured debt
obligations that are contractually subordinated in right of payment to all other present and future non-subordinated obligations of the respective issuing entity. All instruments contributing to TLAC have been
subordinated since 1 January 2020. 4 UBS AG has also recognized funding from UBS Group AG that is designated at fair value. Refer to Note 18b for more information.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 181
Note 14 Amounts due to banks, Customer deposits, and Funding from UBS Group AG (continued)
UBS AG uses interest rate and foreign exchange derivatives to manage the risks inherent in certain debt instruments held
at amortized cost. In some cases, UBS AG applies hedge accounting for interest rate risk as discussed in item 2j in Note
1a and Note 24. As a result of applying hedge accounting, the life-to-date adjustment to the carrying amount of
Funding
from UBS Group AG measured at amortized cost
bn as of 31 December 2025 and a decrease
of USD
bn as of 31 December 2024, reflecting changes in fair value due to interest rate movements.
Of the
Total funding from UBS Group AG measured at amortized cost
bn
pays a fixed interest rate and USD
bn pays a floating rate of interest.
›
Refer to Note 23 for maturity information
Note 15 Debt issued designated at fair value
USD m
31.12.25
31.12.24
Issued debt instruments
Equity-linked
1
Rates-linked
Fixed-rate
Credit-linked
Commodity-linked
Other
Total debt issued designated at fair value
2
of which: issued by UBS AG standalone with original maturity greater than one year
3
1 Includes investment fund unit-linked instruments issued. 2 As of 31 December 2025,
% of Total debt issued designated at fair value was unsecured (31 December 2024:
%). 3 Based on original
contractual maturity without considering any early redemption features.
Note 16 Debt issued measured at amortized cost
USD m
31.12.25
31.12.24
Short-term debt
1
Senior unsecured debt
of which: issued by UBS AG standalone with original maturity greater than one year
Covered bonds
Subordinated debt
of which: eligible as non-Basel III-compliant tier 2 capital instruments
Debt issued through the Swiss central mortgage institutions
Other long-term debt
Long-term debt
2
Total debt issued measured at amortized cost
3,4
1 Debt with an original contractual maturity of less than one year, includes mainly certificates of deposit and commercial paper. 2 Debt with an original contractual maturity greater than or equal to one year. The
classification of debt issued into short-term and long-term does not consider any early redemption features. 3 Net of bifurcated embedded derivatives, the fair value of which was not material for the periods
presented. 4 Except for Covered bonds (
% secured; 31 December 2024:
% secured), Debt issued through the Swiss central mortgage institutions (
% secured; 31 December 2024:
% secured) and
Other long-term debt (
% secured; 31 December 2024:
% secured),
% of the balance was unsecured as of 31 December 2025 (31 December 2024:
% unsecured).
UBS AG uses interest rate and foreign exchange derivatives to manage the risks inherent in certain debt instruments held
at amortized cost. In some cases, UBS AG applies hedge accounting for interest rate risk as discussed in item 2j in Note 1a
and Note 24. As a result of applying hedge accounting, the life-to-date adjustment to the carrying amount of
Debt issued
measured at amortized cost
Subordinated debt consists of unsecured debt obligations that are contractually subordinated in right of payment to all
other present and future non-subordinated obligations of the respective issuing entity. All of the subordinated debt
instruments outstanding as of 31 December 2025 pay a fixed rate of interest.
›
Refer to Note 23 for maturity information
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 182
Note 17 Provisions and contingent liabilities
a) Provisions
The table below presents an overview of total provisions.
Overview of total provisions
USD m
31.12.25
31.12.24
Provisions other than provisions for expected credit losses
Provisions for expected credit losses
1
Total provisions
1 Refer to Note 9 for more information about ECL provisions recognized for off-balance sheet financial instruments and credit lines.
The table below presents additional information for provisions other than provisions for expected credit losses.
Additional information for provisions other than provisions for expected credit losses
Litigation,
regulatory and
similar matters
1
Restructuring
2
Real estate
3
Other
4
Total 2025
Balance at the beginning of the year
Increase in provisions recognized in the income statement
5
Release of provisions recognized in the income statement
(556 )
6
(260 )
(5 )
(70 )
(891 )
Provisions used in conformity with designated purpose
(2,283 )
7
(785 )
(42 )
(114 )
(3,223 )
Foreign currency translation and other movements
Balance at the end of the year
1 Consists of provisions for losses resulting from legal, liability and compliance risks. 2 Includes USD
m of personnel-related restructuring provisions as of 31 December 2025 (31 December 2024: USD
m),
USD
m of provisions for onerous contracts related to real estate as of 31 December 2025 (31 December 2024: USD
m) and USD
m of restructuring provisions for onerous contracts related to technology as
of 31 December 2025 (31 December 2024: USD
m). 3 Mainly includes provisions for reinstatement costs with respect to leased properties. 4 Mainly includes provisions in relation to employee benefits, VAT,
and operational risks. 5 Includes a provision for the estimated costs of UBS’s ongoing obligations with the US Department of Justice as described in item 1 of section b) of this Note. 6 Mainly includes the releases
of provisions regarding the resolution of the legacy matter related to UBS’s cross-border business activities in France in the third quarter of 2025 as described in item 1 of section b) of this Note and the resolution
reached with the US Department of Justice in the second quarter of 2025 as described in item 1 of section b) of this Note. 7 Mainly includes provisions used for the settlement of the legacy matter related to UBS’s
cross-border business activities in France as described in item 1 of section b) of this Note and for the resolutions reached with the US Department of Justice in the second and third quarters of 2025 as described in
item 1 and item 4 of section b) of this Note.
Restructuring provisions are generally recognized as a consequence of management agreeing to materially change the
scope of the business or the manner in which it is conducted, including changes in management structures. Restructuring
provisions relate to onerous contracts and personnel-related provisions. Onerous contracts for property are recognized
when UBS AG is committed to pay for non-lease components, such as utilities, service charges, taxes and maintenance,
when a property is vacated or not fully recovered from sub-tenants. Personnel-related restructuring provisions are
generally used within a short period of time. The level of personnel-related provisions can change when natural staff
attrition reduces the number of people affected by a restructuring event, and therefore results in lower estimated costs.
Information about provisions and contingent liabilities with respect to litigation, regulatory and similar matters, as a class,
is included in Note 17b. There are no material contingent liabilities associated with the other classes of provisions.
b) Litigation, regulatory and similar matters
UBS operates in a legal and regulatory environment that exposes it to significant litigation and similar risks arising from
disputes and regulatory proceedings. As a result, UBS is involved in various disputes and legal proceedings, including
litigation, arbitration, and regulatory and criminal investigations. “UBS”, “we” and “our”, for purposes of this Note,
refer to UBS AG and / or one or more of its subsidiaries, as applicable.
Such matters are subject to many uncertainties, and the outcome and the timing of resolution are often difficult to
predict, particularly in the earlier stages of a case. There are also situations where UBS may enter into a settlement
agreement. This may occur in order to avoid the expense, management distraction or reputational implications of
continuing to contest liability, even for those matters for which UBS believes it should be exonerated. The uncertainties
inherent in all such matters affect the amount and timing of any potential outflows for both matters with respect to
which provisions have been established and other contingent liabilities. UBS makes provisions for such matters brought
against it when, in the opinion of management after seeking legal advice, it is more likely than not that UBS has a present
legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required, and
the amount can be reliably estimated. Where these factors are otherwise satisfied, a provision may be established for
claims that have not yet been asserted against UBS, but are nevertheless expected to be, based on UBS’s experience with
similar asserted claims. If any of those conditions is not met, such matters result in contingent liabilities. If the amount of
an obligation cannot be reliably estimated, a liability exists that is not recognized even if an outflow of resources is
probable. Accordingly, no provision is established even if the potential outflow of resources with respect to such matters
could be significant. Developments relating to a matter that occur after the relevant reporting period, but prior to the
issuance of financial statements, which affect management’s assessment of the provision for such matter (because, for
example, the developments provide evidence of conditions that existed at the end of the reporting period), are adjusting
events after the reporting period under IAS 10 and must be recognized in the financial statements for the reporting
period.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 183
Note 17 Provisions and contingent liabilities (continued)
Specific litigation, regulatory and other matters are described below, including all such matters that management
considers to be material and others that management believes to be of significance to UBS due to potential financial,
reputational and other effects. The amount of damages claimed, the size of a transaction or other information is provided
where available and appropriate in order to assist users in considering the magnitude of potential exposures.
In the case of certain matters below, we state that we have established a provision, and for the other matters, we make
no such statement. When we make this statement and we expect disclosure of the amount of a provision to prejudice
seriously our position with other parties in the matter because it would reveal what UBS believes to be the probable and
reliably estimable outflow, we do not disclose that amount. In some cases we are subject to confidentiality obligations
that preclude such disclosure. With respect to the matters for which we do not state whether we have established a
provision, either: (a) we have not established a provision; or (b) we have established a provision but expect disclosure of
that fact to prejudice seriously our position with other parties in the matter because it would reveal the fact that UBS
believes an outflow of resources to be probable and reliably estimable.
With respect to certain litigation, regulatory and similar matters for which we have established provisions, we are able to
estimate the expected timing of outflows. However, the aggregate amount of the expected outflows for those matters
for which we are able to estimate expected timing is immaterial relative to our current and expected levels of liquidity
over the relevant time periods.
The aggregate amount provisioned for litigation, regulatory and similar matters as a class is disclosed in the “Provisions”
table in Note 17a above. UBS provides below an estimate of the aggregate liability for its litigation, regulatory and similar
matters as a class of contingent liabilities. Estimates of contingent liabilities are inherently imprecise and uncertain as
these estimates require UBS to make speculative legal assessments as to claims and proceedings that involve unique fact
patterns or novel legal theories, that have not yet been initiated or are at early stages of adjudication, or as to which
alleged damages have not been quantified by the claimants. Taking into account these uncertainties and the other factors
described herein, UBS estimates the future losses that could arise from litigation, regulatory and similar matters disclosed
below for which an estimate is possible, that are not covered by existing provisions are in the range of USD
bn to
USD
bn.
Litigation, regulatory and similar matters may also result in non-monetary penalties and consequences. A guilty plea to,
or conviction of, a crime could have material consequences for UBS. Resolution of regulatory proceedings may require
UBS to obtain waivers of regulatory disqualifications to maintain certain operations, may entitle regulatory authorities to
limit, suspend or terminate licenses and regulatory authorizations, and may permit financial market utilities to limit,
suspend or terminate UBS’s participation in such utilities. Failure to obtain such waivers, or any limitation, suspension or
termination of licenses, authorizations or participations, could have material consequences for UBS
.
Provisions for litigation, regulatory and similar matters by business division and in Group Items
1
USD m
Global
Wealth
Manage-
ment
Personal &
Corporate
Banking
Asset
Manage-
ment
Investment
Bank
Non-core
and
Legacy
Group
Items
Total 2025
Balance at the beginning of the year
Increase in provisions recognized in the income statement
2
Release of provisions recognized in the income statement
(310 )
3
(39 )
3
(37 )
(168 )
3
(1 )
(556 )
Provisions used in conformity with designated purpose
(913 )
4
(111 )
4
(1 )
(26 )
(1,213 )
4
(19 )
(2,283 )
Foreign currency translation and other movements
Balance at the end of the year
1 Provisions, if any, for the matters described in items 2 and 9 of this Note are recorded in Global Wealth Management. Provisions, if any, for the matters described in items 4, 5, 6, 7 and 8 of this Note are recorded
in Non-core and Legacy. Provisions, if any, for the matters described in item 1 of this Note are allocated between Global Wealth Management, Personal & Corporate Banking and Non-core and Legacy. Provisions, if
any, for the matters described in item 3 of this Note are allocated between the Investment Bank, Non-core and Legacy and Group Items. Provisions, if any, for the matters described in item 10 of this Note are allocated
between the Investment Bank and Non-core and Legacy. 2 Includes a provision for the estimated costs of UBS’s ongoing obligations with the US Department of Justice as described in item 1 of this Note. 3 Mainly
includes the releases of provisions regarding the resolution of the legacy matter related to UBS’s cross-border business activities in France in the third quarter of 2025 as described in item 1 of this Note and the
resolution reached with the US Department of Justice in the second quarter of 2025 as described in item 1 of this Note. 4 Mainly includes provisions used for the settlement of the legacy matter related to UBS’s
cross-border business activities in France as described in item 1 of this Note and for the resolutions reached with the US Department of Justice in the second and third quarters of 2025 as described in item 1 and
item 4 of this Note.
1. Inquiries regarding cross-border wealth management businesses
Tax and regulatory authorities in a number of countries have made inquiries, served requests for information or examined
employees located in their respective jurisdictions relating to the cross-border wealth management services provided by
UBS, Credit Suisse and other financial institutions, including Credit Suisse offices in the Netherlands and Belgium.
In proceedings in France, UBS AG was found guilty in lower courts of unlawful solicitation of clients on French territory
and aggravated laundering of the proceeds of tax fraud in the period between 2004 and 2012. On appeal, the French
Supreme Court, in November 2023, upheld the lower court’s decision regarding unlawful solicitation and aggravated
laundering of the proceeds of tax fraud, but overturned the awards of penalties, confiscation and civil damages by the
lower court, aggregating EUR
bn, and remanded the case to the Court of Appeal for a retrial regarding these
overturned elements. In September 2025, UBS AG resolved the case and subsequently paid a fine of EUR
m and
EUR
m in civil damages to the French State.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 184
Note 17 Provisions and contingent liabilities (continued)
In May 2014, Credit Suisse AG entered into settlement agreements with the SEC, the Federal Reserve, and the New York
Department of Financial Services and agreed with the US Department of Justice (the DOJ) to plead guilty to conspiring
to aid and assist US taxpayers in filing false tax returns (the 2014 Plea Agreement). Credit Suisse continued to report to
and cooperate with US authorities in accordance with its obligations under the 2014 Plea Agreement, including by
conducting a review of cross-border services provided by Credit Suisse. In this connection, Credit Suisse provided
information to US authorities regarding potentially undeclared US assets held by clients at Credit Suisse since the 2014
Plea Agreement. In May 2025, Credit Suisse Services AG entered into a plea agreement (the 2025 Plea Agreement) with
the DOJ under which it agreed to plead guilty to one count of conspiracy to aid and assist in the preparation of false
income tax returns relating to legacy Credit Suisse accounts booked in Credit Suisse’s Swiss booking center, thereby
settling the investigation into Credit Suisse’s implementation of the 2014 Plea Agreement. In addition, Credit Suisse
Services AG entered into a non-prosecution agreement with the DOJ (the 2025 NPA) relating to legacy Credit Suisse
accounts booked in Credit Suisse’s Singapore booking center. The 2025 Plea Agreement and the 2025 NPA provide for
penalties, restitution and forfeiture of USD
m in the aggregate. The 2025 Plea Agreement and the 2025 NPA include
ongoing obligations of UBS to furnish information and cooperate with DOJ’s investigations of legacy Credit Suisse
accounts held by US persons in its Switzerland and Singapore booking centers and related accounts in other booking
centers.
Our balance sheet at 31 December 2025 reflected provisions in an amount that UBS believes to be appropriate under the
applicable accounting standard. As in the case of other matters for which we have established provisions, the future
outflow of resources in respect of such matters cannot be determined with certainty based on currently available
information and accordingly may ultimately prove to be substantially greater (or may be less) than the provision that we
have recognized.
2. Madoff
In relation to the Bernard L. Madoff Investment Securities LLC (BMIS) investment fraud, UBS AG, UBS (Luxembourg) S.A.
(now UBS Europe SE, Luxembourg branch) and certain other UBS subsidiaries were subject to inquiries by a number of
regulators, including the Swiss Financial Market Supervisory Authority (FINMA) and the Luxembourg Commission de
Surveillance du Secteur Financier. Those inquiries concerned two third-party funds established under Luxembourg law,
substantially all assets of which were with BMIS, as well as certain funds established in offshore jurisdictions with either
direct or indirect exposure to BMIS. These funds faced severe losses, and the Luxembourg funds are in liquidation. The
documentation establishing both funds identifies UBS entities in various roles, including custodian, administrator,
manager, distributor and promoter, and indicates that UBS employees served as board members.
In 2009 and 2010, the liquidators of the two Luxembourg funds filed claims against UBS entities, non-UBS entities and
certain individuals, including current and former UBS employees, seeking amounts totaling approximately EUR
bn,
which includes amounts that the funds may be held liable to pay the trustee for the liquidation of BMIS (BMIS Trustee).
A large number of alleged beneficiaries have filed claims against UBS entities (and non-UBS entities) for purported losses
relating to the Madoff fraud. The majority of these cases have been decided in favor of UBS or dismissed for want of
prosecution.
In the US, the BMIS Trustee filed claims against UBS entities, among others, in relation to the two Luxembourg funds and
one of the offshore funds. The total amount claimed against all defendants in these actions was not less than USD
bn.
In 2014, the US Supreme Court rejected the BMIS Trustee’s motion for leave to appeal decisions, dismissing all claims
against UBS defendants except those for the recovery of approximately USD
m of payments alleged to be fraudulent
conveyances and preference payments. Similar claims have been filed against Credit Suisse entities seeking to recover
redemption payments. In 2016, the bankruptcy court dismissed these claims against the UBS entities and most of the
Credit Suisse entities. In 2019, the Court of Appeals reversed the dismissal of the BMIS Trustee’s remaining claims. The
cases were remanded to the Bankruptcy Court for further proceedings.
3. Foreign exchange, LIBOR and benchmark rates, and other trading practices
Foreign-exchange-related regulatory matters:
concerning possible manipulation of foreign exchange markets and precious metals prices. As a result of these
investigations, UBS entered into resolutions with Swiss, US and UK regulators and the European Commission. UBS was
granted conditional immunity by the Antitrust Division of the DOJ and by authorities in other jurisdictions in connection
with potential competition law violations relating to foreign exchange and precious metals businesses. In December 2021,
the European Commission issued a decision imposing a fine of EUR
m on Credit Suisse entities based on findings of
anticompetitive practices in the foreign exchange market. UBS received leniency and accordingly no fine was assessed.
Credit Suisse appealed the decision to the European General Court and, in July 2025, the court issued a judgment
reducing the fine to EUR
m. The judgment is now final.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 185
Note 17 Provisions and contingent liabilities (continued)
Foreign-exchange-related civil litigation:
Putative class actions have been filed since 2013 in US federal courts and in other
jurisdictions against UBS, Credit Suisse and other banks on behalf of persons who engaged in foreign currency
transactions with any of the defendant banks. UBS and Credit Suisse have resolved US federal court class actions relating
to foreign currency transactions with the defendant banks and persons who transacted in foreign exchange futures
contracts and options on such futures. Certain class members have excluded themselves from that settlement and filed
individual actions in US and English courts against UBS, Credit Suisse and other banks, alleging violations of US and
European competition laws and unjust enrichment. UBS, Credit Suisse and the other banks have resolved those individual
matters. In addition, Credit Suisse and UBS, together with other financial institutions, were named in a consolidated
putative class action in Israel, which made allegations similar to those made in the actions pursued in other jurisdictions.
Credit Suisse and UBS entered into agreements to settle all claims in this action in April 2022 and February 2024,
respectively. Credit Suisse’s settlement received court approval and became final in May 2025. UBS’s settlement remains
subject to court approval.
LIBOR and other benchmark-related regulatory matters:
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at certain
times. UBS and Credit Suisse reached settlements or otherwise concluded investigations relating to benchmark interest
rates with the investigating authorities. UBS was granted conditional leniency or conditional immunity from authorities
in certain jurisdictions, including the Antitrust Division of the DOJ, in connection with potential antitrust or competition
law violations related to certain rates. In December 2025, the Swiss Competition Commission (WEKO) announced that it
had reached a final resolution with UBS.
LIBOR and other benchmark-related civil litigation:
A number of putative class actions and other actions are pending in
the federal courts in New York against UBS and numerous other banks on behalf of parties who transacted in certain
interest rate benchmark-based derivatives. Also pending in the US and in other jurisdictions are a number of other actions
asserting losses related to various products whose interest rates were linked to LIBOR and other benchmarks, including
adjustable rate mortgages, preferred and debt securities, bonds pledged as collateral, loans, depository accounts,
investments and other interest-bearing instruments. The complaints allege manipulation, through various means, of
certain benchmark interest rates, including USD LIBOR, Yen LIBOR, EURIBOR, CHF LIBOR, and GBP LIBOR and seek
unspecified compensatory and other damages under various legal theories.
USD LIBOR class and individual actions in the US:
Beginning in 2013, putative class actions were filed in US federal district
courts (and subsequently consolidated in the US District Court for the Southern District of New York (SDNY)) by plaintiffs
who engaged in over-the-counter instruments, exchange-traded Eurodollar futures and options, bonds or loans that
referenced USD LIBOR. The complaints allege violations of antitrust law and the Commodities Exchange Act, as well as
breach of contract and unjust enrichment. Following various rulings by the SDNY and the US Court of Appeals for the
Second Circuit dismissing certain of the causes of action and allowing others to proceed, one class action with respect to
transactions in over-the-counter instruments and several actions brought by individual plaintiffs proceeded in the district
court. In September 2025, the district court granted defendants’ motion for summary judgment as to all remaining
actions. Plaintiffs have appealed. UBS and Credit Suisse previously entered into settlement agreements in respect of the
class actions relating to exchange-traded instruments, bonds and loans. These settlements have received final court
approval, and the actions have been dismissed as to UBS and Credit Suisse.
Other benchmark class actions in the US:
The Yen LIBOR/Euroyen TIBOR, EURIBOR and GBP LIBOR actions have been
dismissed. Plaintiffs have appealed the dismissals. In August 2025, the Second Circuit affirmed in part and reversed in
part the district court’s dismissal of the complaint in the EURIBOR action, returning the action to the district court. In
September 2025, the Second Circuit affirmed the dismissal of the complaint in the GBP LIBOR action; the matter has
concluded.
In January 2023, defendants moved to dismiss the complaint in the CHF LIBOR action. In 2023, the court approved a
settlement by Credit Suisse of the claims against it in this matter. In September 2025, the court dismissed the complaint
against the remaining defendants, including UBS.
Government bonds:
European Union antitrust rules between 2007 and 2011 relating to European government bonds. The European
Commission fined UBS EUR
m, which amount was confirmed on appeal in March 2025. UBS has appealed to the
European Court of Justice.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 186
Note 17 Provisions and contingent liabilities (continued)
Credit default swap auction litigation –
putative class action filed in federal court in New Mexico alleging manipulation of credit default swap (CDS) final auction
prices. Defendants filed a motion to enforce a previous CDS class action settlement in the SDNY. In January 2024, the
SDNY ruled that, to the extent claims in the New Mexico action arise from conduct prior to 30 June 2014, those claims
are barred by the SDNY settlement. The plaintiffs appealed and, in May 2025, the Second Circuit affirmed the SDNY
decision. Defendants filed a motion for judgment on the pleadings in December 2025.
With respect to additional matters and jurisdictions not encompassed by the settlements and orders referred to above,
UBS’s balance sheet at 31 December 2025 reflected a provision in an amount that UBS believes to be appropriate under
the applicable accounting standard. As in the case of other matters for which we have established provisions, the future
outflow of resources in respect of such matters cannot be determined with certainty based on currently available
information and accordingly may ultimately prove to be substantially greater (or may be less) than the provision that we
have recognized.
4. Mortgage-related matters
Government and regulatory related matters: DOJ RMBS settlement
(CSS LLC) and its current and former US subsidiaries and US affiliates reached a settlement with the DOJ related to its
legacy Residential Mortgage-Backed Securities (RMBS) business, a business conducted through 2007. The settlement
resolved potential civil claims by the DOJ related to certain of those Credit Suisse entities’ packaging, marketing,
structuring, arrangement, underwriting, issuance and sale of RMBS. Pursuant to the terms of the settlement a civil
monetary penalty was paid to the DOJ in January 2017. The settlement also required the Credit Suisse entities to provide
certain levels of consumer relief measures, including affordable housing payments and loan forgiveness, and the DOJ
and Credit Suisse agreed to the appointment of an independent monitor to oversee the completion of the consumer
relief requirements of the settlement. In August 2025, CSS LLC entered into an agreement with the DOJ to resolve all of
Credit Suisse’s outstanding Consumer Relief Obligations under the 2017 settlement by paying USD
m.
Civil litigation: Repurchase litigations –
their roles as issuer, sponsor, depositor, underwriter and/or servicer of RMBS transactions. These cases currently include
repurchase actions by RMBS trusts and/or trustees, in which plaintiffs generally allege breached representations and
warranties in respect of mortgage loans and failure to repurchase such mortgage loans as required under the applicable
agreements. The amounts disclosed below do not reflect actual realized plaintiff losses to date. Unless otherwise stated,
these amounts reflect the original unpaid principal balance amounts as alleged in these actions.
DLJ Mortgage Capital, Inc. (DLJ) is a defendant in New York State court in five actions: An action brought by Asset Backed
Securities Corporation Home Equity Loan Trust, Series 2006-HE7 alleges damages of not less than USD
m. In
December 2023, the trial court granted in part DLJ’s motion to dismiss, dismissing with prejudice all notice-based claims.
On appeal, the appellate court modified the trial court’s dismissal in April 2025 to reinstate certain of plaintiff’s notice-
based claims and otherwise dismissed plaintiff’s claims. Plaintiff has sought leave from the New York Court of Appeals to
further appeal the dismissal of certain of its claims. An action by Home Equity Asset Trust, Series 2006-8, alleges damages
of not less than USD
m. An action by Home Equity Asset Trust 2007-1 alleges damages of not less than USD
m.
In August 2025, the parties agreed to a settlement to resolve this litigation for USD
m. The settlement has received
court approval and is final. An action by Home Equity Asset Trust 2007-2 alleges damages of not less than USD
m.
An action by CSMC Asset-Backed Trust 2007-NC1 does not allege a damages amount.
5. ATA litigation
Since November 2014, a series of lawsuits have been filed against a number of banks, including Credit Suisse, in the US
District Court for the Eastern District of New York (EDNY) and the SDNY alleging claims under the United States Anti-
Terrorism Act (ATA) and the Justice Against Sponsors of Terrorism Act. The plaintiffs in each of these lawsuits are, or are
relatives of, victims of various terrorist attacks in Iraq and allege a conspiracy and/or aiding and abetting based on
allegations that various international financial institutions, including the defendants, agreed to alter, falsify or omit
information from payment messages that involved Iranian parties for the express purpose of concealing the Iranian
parties’ financial activities and transactions from detection by US authorities. The lawsuits allege that this conduct has
made it possible for Iran to transfer funds to Hezbollah and other terrorist organizations actively engaged in harming US
military personnel and civilians. In January 2023, the Second Circuit affirmed a September 2019 ruling by the EDNY
granting defendants’ motion to dismiss the first filed lawsuit. In October 2023, the US Supreme Court denied plaintiffs’
petition for a writ of certiorari, and in September 2025 the EDNY denied plaintiffs’ motion to vacate the judgment; the
matter has concluded. Of the other seven cases, four are stayed, including one that was dismissed as to Credit Suisse
and most of the bank defendants prior to entry of the stay, and in three cases defendants moved to dismiss plaintiffs’
amended complaints.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 187
Note 17 Provisions and contingent liabilities (continued)
6. Customer account matters
Several clients have claimed that a former relationship manager in Switzerland had exceeded his investment authority in
the management of their portfolios, resulting in excessive concentrations of certain exposures and investment losses.
Credit Suisse AG has investigated the claims, as well as transactions among the clients. Credit Suisse AG filed a criminal
complaint against the former relationship manager with the Geneva Prosecutor’s Office upon which the prosecutor
initiated a criminal investigation. Several clients of the former relationship manager also filed criminal complaints with
the Geneva Prosecutor’s Office. In February 2018, the former relationship manager was sentenced to five years in prison
by the Geneva criminal court for fraud, forgery and criminal mismanagement and ordered to pay damages of
approximately USD
m. On appeal, the Criminal Court of Appeals of Geneva and, subsequently, the Swiss Federal
Supreme Court upheld the main findings of the Geneva criminal court.
Civil lawsuits have been initiated against Credit Suisse AG and / or certain affiliates in various jurisdictions, based on the
findings established in the criminal proceedings against the former relationship manager.
In Singapore, in a now-concluded civil lawsuit, Credit Suisse Trust Limited was ordered to pay USD
m, including
interest and costs.
In Bermuda, in the civil lawsuit brought against Credit Suisse Life (Bermuda) Ltd., the Supreme Court of Bermuda issued
a judgment awarding damages of USD
m to the plaintiff. Credit Suisse Life (Bermuda) Ltd. appealed the decision.
In June 2023, the Bermuda Court of Appeal confirmed the award and the Supreme Court of Bermuda’s finding that
Credit Suisse Life (Bermuda) Ltd. breached its contractual and fiduciary duties, but overturned the finding that Credit
Suisse Life (Bermuda) Ltd. made fraudulent misrepresentations. In March 2024, Credit Suisse Life (Bermuda) Ltd. was
granted leave to appeal the judgment to the Judicial Committee of the Privy Council and a hearing on the appeal was
held in June 2025. The Bermuda Court of Appeal also ordered that the current stay continue pending determination of
the appeal on the condition that the damages awarded, plus interest calculated at the Bermuda statutory rate of
%,
remain in the escrow account. In November 2025, the Judicial Committee of the Privy Council issued its final judgment
on the appeal, denying Credit Suisse Life (Bermuda) Ltd.’s appeal on liability, but partially granting its appeal concerning
the quantum of damages and directing the parties to recalculate damages.
In Switzerland, certain civil lawsuits have been commenced against Credit Suisse AG and UBS AG (as the successor of
Credit Suisse AG) in the Court of First Instance of Geneva since March 2023.
7. Mozambique matter
Credit Suisse was subject to investigations by regulatory and enforcement authorities, as well as civil litigation, regarding
certain Credit Suisse entities’ arrangement of loan financing to Mozambique state enterprises, Proindicus S.A. and
Empresa Moçambicana de Atum S.A. (EMATUM), a distribution to private investors of loan participation notes (LPN)
related to the EMATUM financing in September 2013, and certain Credit Suisse entities’ subsequent role in arranging
the exchange of those LPNs for Eurobonds issued by the Republic of Mozambique. In 2019, three former Credit Suisse
employees pleaded guilty in the EDNY to accepting improper personal benefits in connection with financing transactions
carried out with two Mozambique state enterprises.
In October 2021, Credit Suisse reached settlements with the DOJ, the US Securities and Exchange Commission (SEC), the
UK Financial Conduct Authority (FCA) and FINMA to resolve inquiries by these agencies, including findings that Credit
Suisse failed to appropriately organize and conduct its business with due skill and care, and manage risks. Credit Suisse
Group AG entered into a three-year Deferred Prosecution Agreement (DPA) with the DOJ in connection with the criminal
information charging Credit Suisse Group AG with conspiracy to commit wire fraud and Credit Suisse Securities (Europe)
Limited (CSSEL) entered into a Plea Agreement and pleaded guilty to one count of conspiracy to violate the US federal
wire fraud statute. Under the terms of the DPA, UBS Group AG (as successor to Credit Suisse Group AG) continued
compliance enhancement and remediation efforts agreed by Credit Suisse, and undertake additional measures as outlined
in the DPA. In January 2025, as permitted under the terms of the DPA, the DOJ elected to extend the term of the DPA
until January 2026.
8. ETN-related litigation
XIV litigation:
purchasers of VelocityShares Daily Inverse VIX Short-Term Exchange Traded Notes linked to the S&P 500 VIX Short-Term
Futures Index (XIV ETNs). The complaints have been consolidated and asserts claims against Credit Suisse for violations
of various anti-fraud and anti-manipulation provisions of US securities laws arising from a decline in the value of XIV ETNs
in February 2018. On appeal from an order of the SDNY dismissing all claims, the Second Circuit issued an order that
reinstated a portion of the claims. In decisions in March 2023 and February 2025, the court granted class certification for
two of the three classes proposed by plaintiffs and denied class certification of the third proposed class.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 188
Note 17 Provisions and contingent liabilities (continued)
9. Credit Suisse anti-money laundering matters
In December 2020, the Swiss Office of the Attorney General brought charges against Credit Suisse AG and other parties
concerning the diligence and controls applied to a historical relationship with Bulgarian former clients who are alleged
to have laundered funds through Credit Suisse AG accounts. In June 2022, following a trial, Credit Suisse AG was
convicted in the Swiss Federal Criminal Court of certain historical organizational inadequacies in its anti-money-
laundering framework and ordered to pay a fine of CHF
m. In addition, the court seized certain client assets in the
amount of approximately CHF
m and ordered Credit Suisse AG to pay a compensatory claim in the amount of
approximately CHF
m. Credit Suisse AG appealed the decision to the Chamber of Appeals of the Swiss Federal Criminal
Court (Chamber of Appeals). Following the merger of UBS AG and Credit Suisse AG, UBS AG confirmed the appeal. In
November 2024, the Chamber of Appeals acquitted UBS AG and annulled the fine and compensatory claim ordered by
the first instance court. Subsequently, the Office of the Attorney General has appealed the judgment to the Swiss Federal
Supreme Court. UBS has also appealed, limited to the issue of whether a successor entity by merger can be criminally
liable for acts of the predecessor entity. In July 2025, the Swiss Federal Supreme Court remanded the case back to the
Chamber of Appeals for a full and reasoned judgment. In March 2026, the Chamber of Appeals issued a judgment again
acquitting UBS AG. This judgment may be appealed by the parties to the Swiss Federal Supreme Court. Separately, in
November 2025, the Swiss Office of the Attorney General filed criminal charges against UBS Group and UBS AG, as the
successors to Credit Suisse Group AG and Credit Suisse AG, respectively, alleging that Credit Suisse failed to maintain
appropriate controls to detect and prevent money laundering in connection with certain payments from accounts at
Credit Suisse by parties associated with the Mozambique transactions between 2013 and 2016.
10. Archegos
Credit Suisse and UBS have received requests for documents and information in connection with inquiries, investigations
and/or actions relating to their relationships with Archegos Capital Management (Archegos), including from FINMA
(assisted by a third party appointed by FINMA), the DOJ, the SEC, the US Federal Reserve, the US Commodity Futures
Trading Commission (CFTC), the US Senate Banking Committee, the Prudential Regulation Authority (PRA), the FCA, the
WEKO, the Hong Kong Competition Commission and other regulatory and governmental agencies. UBS is cooperating
with the authorities in these matters. In July 2023, CSI and CSSEL entered into a settlement agreement with the PRA
providing for the resolution of the PRA’s investigation. Also in July 2023, FINMA issued a decree ordering remedial
measures and the Federal Reserve Board issued an Order to Cease and Desist. Under the terms of the order, Credit Suisse
paid a civil money penalty and agreed to undertake certain remedial measures relating to counterparty credit risk
management, liquidity risk management and non-financial risk management, as well as enhancements to board oversight
and governance. UBS Group, as the legal successor to Credit Suisse Group AG, is a party to the FINMA decree and Federal
Reserve Board Cease and Desist Order.
Civil actions relating to Credit Suisse’s relationship with Archegos have been filed against Credit Suisse and/or certain
officers and directors, including claims for breaches of fiduciary duties. In one such case, the parties agreed in July 2025
to a settlement of USD
m that remains subject to court approval. Because the action was brought by shareholders on
behalf of and for the benefit of Credit Suisse, after deducting any Court-awarded attorneys’ fees and expenses and any
applicable taxes, the cash recovery for the settlement will go to UBS, as successor to Credit Suisse, and will result in a net
recovery for UBS.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 189
Note 18 Other liabilities
a) Other financial liabilities measured at amortized cost
USD m
31.12.25
31.12.24
Other accrued expenses
Accrued interest expenses
Settlement and clearing accounts
Lease liabilities
Other
Total other financial liabilities measured at amortized cost
b) Other financial liabilities designated at fair value
USD m
31.12.25
31.12.24
Financial liabilities related to unit-linked investment contracts
Securities financing transactions
Over-the-counter debt instruments and other
Funding from UBS Group AG
1
Total other financial liabilities designated at fair value
1 Funding from UBS Group AG consists of subordinated debt of UBS AG and its subsidiaries toward UBS Group AG. Subordinated debt consists of unsecured debt obligations that are contractually subordinated in
right of payment to all other present and future non-subordinated obligations of the respective issuing entity.
c) Other non-financial liabilities
USD m
31.12.25
31.12.24
Compensation-related liabilities
of which: financial advisor compensation plans
of which: cash awards and other compensation plans
of which: net defined benefit liability
of which: other compensation-related liabilities
1
Current tax liabilities
Deferred tax liabilities
VAT, withholding tax and other tax payables
Deferred income
Liabilities of disposal groups held for sale
2
Other
Total other non-financial liabilities
1 Includes liabilities for payroll taxes and untaken vacation. 2 Refer to Note 28 for more information about the sale of Select Portfolio Servicing.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 190
Additional information
Note 19 Expected credit loss measurement
a) Expected credit losses in the period
Total net credit loss expenses were USD
m in 2025, reflecting net credit loss expenses of USD
m related to stage 1
and 2 positions and net credit loss expenses of USD
m related to credit-impaired (stage 3) positions, predominantly
in the corporate lending portfolios.
›
Refer to Note 19b for more information regarding changes to ECL models, scenarios, scenario weights and post-model
adjustments and to Note 19c for more information regarding the development of ECL allowances and provisions
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Total
For the year ended 31.12.25
Global Wealth Management
(13 )
Personal & Corporate Banking
(2 )
Asset Management
Investment Bank
Non-core and Legacy
(2 )
Group Items
Total
For the year ended 31.12.24
Global Wealth Management
(49 )
(1 )
Personal & Corporate Banking
(61 )
Asset Management
Investment Bank
Non-core and Legacy
(5 )
Group Items
Total
(63 )
For the year ended 31.12.23
Global Wealth Management
(2 )
Personal & Corporate Banking
Asset Management
(1 )
(1 )
Investment Bank
Non-core and Legacy
Group Items
Total
b) Changes to ECL models, scenarios, scenario weights and key inputs
Refer to Note 1a for information about the principles governing expected credit loss (ECL) models, scenarios, scenario
weights and key inputs.
Governance
Comprehensive cross-functional and cross-divisional governance processes are in place and are used to discuss and approve
scenario updates and weights, to assess whether significant increases in credit risk resulted in stage transfers, to review
model outputs and to reach conclusions regarding post-model adjustments.
Model changes
During 2025, the regular and the Credit Suisse integration-related model review and enhancement processes led to
adjustments in the probability of default (PD), loss given default (LGD) and credit conversion factor (CCF) models, resulting
in net releases of USD
m. This included USD
m releases related to real estate lending, driven by USD
m releases
in Switzerland, partly offset by USD
m expenses in the US. The corporate lending portfolio contributed USD
m
expenses (USD
m expenses in Personal & Corporate Banking, partly offset by USD
m releases in the Investment Bank),
with USD
m expenses in the remaining segments.
Scenario and key input updates
During 2025, the scenarios and related macroeconomic factors were updated from those applied at the end of 2024 by
considering the prevailing economic and political conditions and uncertainty. The review focused on events that significantly
changed the economic outlook during the year: an escalation of trade and geopolitical tensions globally, along with
uncertainty regarding the inflation and growth outlook leading to divergent monetary policy paths.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 191
Note 19 Expected credit loss measurement (continued)
Baseline scenario:
the projections of the baseline scenario, which are aligned to the economic and market assumptions
used for UBS’s business planning purposes, are broadly in line with external benchmarks, such as those from Bloomberg
Consensus, Oxford Economics and the International Monetary Fund World Economic Outlook. The expectation for 2026
is that the global economy will navigate a soft patch in the first half of the year, as tariffs still feed through to prices and
exports, but accelerate in the second half of the year, supported by improved confidence, a positive credit impulse and
several major advanced economies benefiting from fiscal stimulus. In the US, inflation is likely to remain elevated in the
first half of the year and weigh on real incomes, but the support from the One Big Beautiful Bill should emerge over time.
Weakness in the labor market should prompt the Federal Reserve to deliver more cuts in the next few meetings, although
in a measured fashion, as inflation hovering above its target remains a risk.
Long-term interest rates in key developed
markets are expected to rise slightly over the rest of the year. House price growth for 2026 is supported by strong data
in 2025. However, less price upside is expected in the following months as the economy weakens.
Moderate stagflation crisis scenario:
The first hypothetical downside scenario is the moderate stagflation crisis scenario.
The moderate stagflation crisis scenario assumes heightened geopolitical and trade tensions that disrupt supply chains
and drive inflationary pressures. Despite signs of slowing global demand, resilient labor markets sustain upward wage
pressures and escalating geopolitical tensions prompt central banks to hike interest rates and actively reduce their balance
sheets. Yield curves steepen and the global economy and financial markets are negatively affected.
Global trade war scenario:
The second downside scenario is aligned with the 2026 Group binding stress scenario and
was updated in 2025 to reflect relevant risks. The global trade war scenario assumes heightened geopolitical tensions
and explores tail risks concerning US protectionist policies and retaliation by the US’s trading partners. US policies solidify
Switzerland as a safe-haven country and the US dollar depreciates against the Swiss franc. The scenario assumes that
disruptions in global trade contribute to rising inflation and a large economic contraction. Despite rising inflation, the
Federal Reserve makes measured rate cuts, and other major central banks in advanced economies follow the same course.
Asset price appreciation scenario:
The upside scenario is based on positive developments, such as an easing of geopolitical
tensions across the globe, less fear of a Chinese hard landing, falling oil prices and resilient labor markets, which enhance
economic stability and confidence. Under these circumstances, the adoption of productivity-enhancing technologies
boosts economic growth and strengthens risk appetite. As a result, asset prices rise sustainably.
The table below details the key assumptions for the four scenarios applied as of 31 December 2025.
Scenario generation, review process and governance
A team of economists within Group Risk Control develops the forward-looking macroeconomic assumptions, supported
and challenged by experts from relevant functions.
The scenarios, their weights and the key macroeconomic and other factors are subject to a critical assessment by the
IFRS 9 Scenario Sounding Sessions and ECL Management Forum, which include senior management from Group Risk
and Group Finance. An important consideration in the review is whether there may be particular credit risk concerns that
are not possible to address systematically, requiring post-model adjustments for stage allocation and ECL allowances.
The Group Chief Financial Officer and the Group Chief Risk Officer ratify the decisions taken by the ECL Management
Forum.
Scenario weights and post-model adjustments
The asset price appreciation scenario was added, two scenarios were substituted and -weights were adjusted over the
course of 2025. The mild debt crisis scenario was replaced by the moderate stagflation crisis scenario, and the
stagflationary geopolitical crisis scenario was replaced by the global trade war scenario. Scenario weights were adjusted
during 2025 in line with the shift in risks and their coverage in the scenarios. The asset price appreciation, baseline,
moderate stagflation crisis and global trade war scenarios had a
%,
%,
% and
% weight, respectively, as of 31
December 2025.
However, unquantifiable risks continue to be relevant, as geopolitical risks remained high in 2025, and the impact on the
world economy from escalations with unforeseeable consequences could be severe. In the near term, this uncertainty
relates primarily to developments in US domestic and foreign policies, the Russia–Ukraine war, European security, and
regional conflicts.
Models, which are based on supportable statistical information from past experiences regarding interdependencies of
macroeconomic factors and their implications for credit risk portfolios, cannot comprehensively reflect such extraordinary
events, such as a pandemic or a fundamental change in the world political order. Rather than creating multiple additional
scenarios to attempt to gauge these risks and applying model parameters that lack supportable information and cannot
be robustly validated, management continued to also apply post-model adjustments.
Total stage 1 and 2 allowances and provisions were USD
m as of 31 December 2025 and included post-model
adjustments of USD
m (31 December 2024: USD
m). Post-model adjustments were made to address uncertainty
levels, including those arising from the broad geopolitical uncertainty and US trade tariffs, and mainly relate to corporate
lending books in Switzerland.
In 2024, post-model adjustments also addressed uncertainty levels to align Credit Suisse’s
model outputs with those expected under the comparable UBS models.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 192
Note 19 Expected credit loss measurement (continued)
Scenario weights were as illustrated in the table below.
Economic scenarios and weights applied
Assigned weights in %
ECL scenario
31.12.25
31.12.24
Asset price appreciation / inflation
Baseline
Mild debt crisis
Moderate stagflation crisis
Stagflationary geopolitical crisis
Global trade war
Scenario assumptions
One year
Three years cumulative
31.12.25
Asset price
appreciation
Baseline
Moderate
stagflation
crisis
Global trade
war
Asset price
appreciation
Baseline
Moderate
stagflation
crisis
Global trade
war
Real GDP growth (percentage change)
United States
(1.4 )
(6.8 )
(2.7 )
Eurozone
(1.6 )
(7.9 )
(0.6 )
(4.6 )
Switzerland
(1.2 )
(6.3 )
(3.0 )
Consumer price index (percentage change)
United States
Eurozone
Switzerland
Unemployment rate (end-of-period level, %)
United States
Eurozone
Switzerland
Fixed income: 10-year government bonds (change in yields, basis points)
USD
EUR
CHF
Equity indices (percentage change)
S&P 500
(25.0 )
(50.0 )
(5.2 )
(33.0 )
EuroStoxx 50
(25.0 )
(50.0 )
(13.9 )
(33.5 )
SPI
(25.0 )
(50.0 )
(9.0 )
(29.0 )
Swiss real estate (percentage change)
Single-Family Homes
(3.4 )
(18.5 )
(4.2 )
(25.6 )
Other real estate (percentage change)
United States (S&P / Case–Shiller)
(6.2 )
(25.6 )
(7.3 )
(33.0 )
Eurozone (House Price Index)
(5.1 )
(12.4 )
(6.7 )
(18.8 )
Scenario assumptions
One year
Three years cumulative
31.12.24
Asset price
inflation
Baseline
Mild debt
crisis
Stagflationary
geopolitical
crisis
Asset price
inflation
Baseline
Mild debt
crisis
Stagflationary
geopolitical
crisis
Real GDP growth (percentage change)
United States
(1.4 )
(4.8 )
(4.4 )
Eurozone
(1.7 )
(5.6 )
(0.1 )
(5.7 )
Switzerland
(1.1 )
(4.8 )
(4.9 )
Consumer price index (percentage change)
United States
Eurozone
Switzerland
(0.2 )
Unemployment rate (end-of-period level, %)
United States
Eurozone
Switzerland
Fixed income: 10-year government bonds (change in yields, basis
points)
USD
(137 )
(77 )
EUR
(113 )
(68 )
CHF
(4 )
(22 )
(1 )
Equity indices (percentage change)
S&P 500
(28.1 )
(56.5 )
(14.0 )
(51.2 )
EuroStoxx 50
(0.6 )
(27.9 )
(56.6 )
(18.3 )
(52.7 )
SPI
(0.6 )
(26.0 )
(56.6 )
(13.0 )
(52.7 )
Swiss real estate (percentage change)
Single-Family Homes
(4.3 )
(18.5 )
(3.0 )
(28.6 )
Other real estate (percentage change)
United States (S&P / Case–Shiller)
(7.6 )
(20.2 )
(5.2 )
(30.5 )
Eurozone (House Price Index)
(6.1 )
(8.4 )
(5.6 )
(12.9 )
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 193
Note 19 Expected credit loss measurement (continued)
c) Development of ECL allowances and provisions
The ECL allowances and provisions recognized in the period are impacted by a variety of factors, such as:
–
the effect of selecting and updating forward-looking scenarios and the respective weights;
–
origination of new instruments during the period;
–
the effect of passage of time (lower residual lifetime PD and the effect of discount unwind) as the ECL on an instrument
for the remaining lifetime decreases (all other factors remaining the same);
–
derecognition of instruments in the period;
–
change in individual asset quality of instruments;
–
movements from a maximum 12-month ECL to the recognition of lifetime ECL (and vice versa) following transfers
between stages 1 and 2;
–
movements from stages 1 and 2 to stage 3 (credit-impaired status) when default has become certain and PD increases
to 100% (or vice versa);
–
changes in models or updates to model parameters;
–
write-offs; and
–
foreign exchange translation for assets denominated in foreign currencies.
The table below explains the changes in the ECL allowances and provisions for on- and off-balance sheet financial
instruments and credit lines within the scope of ECL requirements between the beginning and the end of the period due
to the factors listed above.
Development of ECL allowances and provisions
USD m
Total
Stage 1
Stage 2
Stage 3
Balance as of 31 December 2024
(3,527 )
(487 )
(623 )
(2,417 )
Net movement from new and derecognized transactions
1
(1 )
(28 )
of which: Private clients with mortgages
of which: Real estate financing
(3 )
of which: Large corporate clients
(17 )
(22 )
of which: Ship and aircraft financing
(2 )
(2 )
of which: SME clients
of which: Other
(8
Remeasurements with stage transfers
2
(284 )
(312 )
of which: Private clients with mortgages
of which: Real estate financing
(3 )
(7 )
of which: Large corporate clients
(88 )
(32 )
(76 )
of which: SME clients
(148 )
(6 )
(142 )
of which: Other
(87 )
(1 )
(87 )
Remeasurements without stage transfers
3
(277 )
(52 )
(229 )
of which: Private clients with mortgages
(20 )
(9 )
(13 )
of which: Real estate financing
(24 )
(5 )
(19 )
of which: Large corporate clients
(74 )
(20 )
(1 )
(52 )
of which: Ship and aircraft financing
of which: SME clients
(153 )
(22 )
(8 )
(123 )
of which: Other
(26
(5
(21
(8 )
(6 )
(3 )
(6 )
(7 )
Model changes
4
Movements with profit or loss impact
5
(549 )
(43 )
(542 )
Movements without profit or loss impact (write-off, FX and other)
6
(45 )
(73 )
Balance as of 31 December 2025
(3,982 )
(575 )
(661 )
(2,746 )
1 Represents the increase and decrease in allowances and provisions resulting from financial instruments (including guarantees and facilities) that were newly originated, purchased or renewed and from the final
derecognition of loans or facilities on their maturity date or earlier. 2 Represents the remeasurement between 12-month and lifetime ECL due to stage transfers. 3 Represents the change in allowances and provisions
related to changes in model inputs or assumptions, including changes in forward -looking macroeconomic conditions, changes in the exposure profile, PD and LGD changes, and unwinding of the time value.
4 Represents the change in the allowances and provisions related to changes in models and methodologies. 5 Includes ECL movements from new and derecognized transactions, remeasurement changes, and model
and methodology changes. 6 Represents the decrease in allowances and provisions resulting from write-offs of the ECL allowance against the gross carrying amount when all or part of a financial asset is deemed
uncollectible or forgiven and movements in foreign exchange rates.
Movements with profit or loss impact
: stage 1 and 2 ECL allowances and provisions increased on a net basis by USD
m.
–
Net movement from new and derecognized transactions
m and stage 2 releases
of USD
m. Stage 1 increases were mainly driven by growth in the corporate lending portfolios, while stage 2 releases
were predominantly due to repayments in other smaller segments.
–
Remeasurements with stage transfers
m in releases in stage 1, primarily driven by the corporate lending
portfolio and USD
m releases in stage 2. Movements in stage 2 include expenses of USD
m following corporate
credit reviews. These expenses were offset by releases of USD
m in the real estate lending portfolio.
–
Stage 3 exposures which were already defaulted as of 31 December 2025 contributed approximately
% to stage 3
expenses.
–
For model changes
, refer to Note 19b for more information.
Movements without profit or loss impact:
stage 1 and 2 allowances increased by USD
m, almost entirely due to
foreign exchange effects.
Stage 3 allowances decreased by USD
m, driven by net write-offs of USD
m, partly offset by foreign exchange
effects and other movements totaling USD
m.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 194
Note 19 Expected credit loss measurement (continued)
Development of ECL allowances and provisions
USD m
Total
Stage 1
Stage 2
Stage 3
Balance as of 31 December 2023
(1,244 )
(308 )
(272 )
(664 )
Merger with Credit Suisse AG
(2,114 )
(322 )
(268 )
(1,523 )
Net movement from new and derecognized transactions
1
(16 )
(6 )
(21 )
of which: Private clients with mortgages
(7 )
of which: Real estate financing
of which: Large corporate clients
(46 )
(21 )
(36 )
of which: SME clients
of which: Other
(2 )
Remeasurements with stage transfers
2
(453 )
(31 )
(445 )
of which: Private clients with mortgages
(3 )
(3 )
of which: Real estate financing
(9 )
(5 )
(5 )
of which: Large corporate clients
(73 )
(7 )
(82 )
of which: SME clients
(318 )
(9 )
(312 )
of which: Other
(50 )
(8 )
(46 )
(1 )
Remeasurements without stage transfers
3
(26 )
(175 )
of which: Private clients with mortgages
(2 )
of which: Real estate financing
of which: Large corporate clients
(17 )
of which: SME clients
(94 )
(100 )
of which: Other
(59 )
(28 )
(65 )
(9 )
(21 )
(3 )
(1 )
(6 )
Model changes
4
(49 )
(14 )
(35 )
Movements with profit or loss impact
5
(544 )
(55 )
(608 )
Movements without profit or loss impact (write-off, FX and other)
6
(28 )
Balance as of 31 December 2024
(3,527 )
(487 )
(623 )
(2,417 )
1 Represents the increase and decrease in allowances and provisions resulting from financial instruments (including guarantees and facilities) that were newly originated, purchased or renewed and from the final
derecognition of loans or facilities on their maturity date or earlier. 2 Represents the remeasurement between 12-month and lifetime ECL due to stage transfers. 3 Represents the change in allowances and provisions
related to changes in model inputs or assumptions, including changes in forward -looking macroeconomic conditions, changes in the exposure profile, PD and LGD changes, and unwinding of the time value.
4 Represents the change in the allowances and provisions related to changes in models and methodologies. 5 Includes ECL movements from new and derecognized transactions, remeasurement changes, and model
and methodology changes. 6 Represents the decrease in allowances and provisions resulting from write-offs of the ECL allowance against the gross carrying amount when all or part of a financial asset is deemed
uncollectible or forgiven and movements in foreign exchange rates.
As explained in Note 1a, the assessment of a significant increase in credit risk (an SICR) considers a number of qualitative
and quantitative factors to determine whether a stage transfer between stage 1 and stage 2 is required, although the
primary assessment considers changes in PD based on rating analyses and economic outlook. Additionally, UBS AG takes
into consideration counterparties that have moved to a credit watch list and those with payments that are at least 30
days past due.
ECL stage 2 (“significant deterioration in credit risk”) allowances / provisions as of 31 December 2025 – classification by
trigger
USD m
Total
of which:
PD layer
of which:
watch list
of which:
≥30 days
past due
Private clients with mortgages
(18 )
(11 )
(7 )
Real estate financing
(27 )
(26 )
(1 )
Large corporate clients
(178 )
(79 )
(95 )
(5 )
SME clients
(119 )
(97 )
(19 )
(3 )
Ship / aircraft financing
(10 )
(9 )
(1 )
Loans to financial advisors
(1 )
(1 )
Consumer financing/ credit cards
(39 )
(16 )
(23 )
Other
(269 )
(268 )
(1 )
(1 )
On- and off-balance sheet
(661 )
(489 )
(131 )
(42 )
d) Maximum exposure to credit risk
The tables below provide UBS AG’s maximum exposure to credit risk for financial instruments subject to ECL requirements
and the respective collateral and other credit enhancements mitigating credit risk for these classes of financial
instruments.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 195
Note 19 Expected credit loss measurement (continued)
The maximum exposure to credit risk includes the carrying amounts of financial instruments recognized on the balance
sheet subject to credit risk and the notional amounts for off-balance sheet arrangements. Where information is available,
collateral is presented at fair value. For other collateral, such as real estate, a reasonable alternative value is used. Credit
enhancements, such as credit derivative contracts and guarantees, are included at their notional amounts. Both are
capped at the maximum exposure to credit risk for which they serve as security. The “Risk management and control”
section of this report describes management’s view of credit risk and the related exposures, which can differ in certain
respects from the requirements of IFRS Accounting Standards.
Maximum exposure to credit risk
31.12.25
Collateral
1,2
Credit enhancements
1
Exposure to
credit risk
after collateral
and credit
enhancements
USD bn
Maximum
exposure to
credit risk
Cash
collateral
received
Collateralized
by equity
and debt
instruments
Secured by
real estate
Other
collateral
3
Netting
Credit
derivative
contracts
Guarantees
and sub-
participations
Financial assets measured at
amortized cost on the balance sheet
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions
measured at amortized cost
Cash collateral receivables on derivative
instruments
4,5
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at amortized cost
Financial assets measured at fair value
through other comprehensive income – debt
Total maximum exposure to credit risk reflected on
the balance sheet within the scope of ECL
Guarantees
6
Irrevocable loan commitments
Forward starting reverse repurchase and securities
borrowing agreements
Committed unconditionally revocable credit lines
Total maximum exposure to credit risk not reflected
on the balance sheet within the scope of ECL
31.12.24
Collateral
1,2
Credit enhancements
1
Exposure to
credit risk
after collateral
and credit
enhancements
USD bn
Maximum
exposure to
credit risk
Cash
collateral
received
Collateralized
by equity
and debt
instruments
Secured by
real estate
Other
collateral
3
Netting
Credit
derivative
contracts
Guarantees
and sub-
participations
Financial assets measured at
amortized cost on the balance sheet
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions
measured at amortized cost
Cash collateral receivables on derivative
instruments
4,5
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at amortized cost
Financial assets measured at fair value
through other comprehensive income – debt
Total maximum exposure to credit risk reflected on
the balance sheet within the scope of ECL
Guarantees
6
Irrevocable loan commitments
Forward starting reverse repurchase and securities
borrowing agreements
Committed unconditionally revocable credit lines
Total maximum exposure to credit risk not reflected
on the balance sheet within the scope of ECL
1 Of which USD
m for 31 December 2025 (31 December 2024: USD
m) relates to total credit-impaired financial assets measured at amortized cost and USD
m for 31 December 2025 (31 December
2024: USD
m) relates to total off-balance sheet financial instruments and credit lines for credit-impaired positions. 2 Collateral arrangements generally incorporate a range of collateral, including cash, equity
and debt instruments, real estate, and other collateral. For the purpose of this disclosure, UBS AG applies a risk-based approach that generally prioritizes collateral according to its liquidity profile. In the case of loan
facilities with funded and unfunded elements, the collateral is first allocated to the funded element. For legacy Credit Suisse infrastructure a risk-based approach is applied that generally prioritizes real estate collateral
and prioritizes other collateral according to its liquidity profile. In the case of loan facilities with funded and unfunded elements, the collateral is proportionally allocated. 3 Includes but is not limited to life insurance
contracts, rights in respect of subscription or capital commitments from fund partners, lien claims on assets of borrowers, leasing items, mortgage loans, inventory, gold and other commodities. 4 Included within
Cash collateral receivables on derivative instruments are margin balances due from exchanges or clearing houses. Some of these margin balances reflect amounts transferred on behalf of clients who retain the
associated credit risk. 5 The amount shown in the “Netting” column represents the netting potential not recognized on the balance sheet. Refer to Note 21 for more information. 6 Guarantees collateralized by
equity and debt instruments include certain overnight repurchase and reverse repurchase transactions where UBS acts as a sponsoring member for eligible clients when clearing through the Fixed Income Clearing
Corporation (the FICC). As part of this arrangement, UBS guarantees the FICC for prompt and full payment and performance of the clients‘ respective obligations under the FICC’s rules. The Group minimizes its liability
under these guarantees by obtaining a security interest in the cash or high-quality securities collateral that the clients place with the clearing house; therefore, the risk of loss is expected to be remote.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 196
Note 19 Expected credit loss measurement (continued)
e) Financial assets subject to credit risk by rating category
The table below shows the credit quality and the maximum exposure to credit risk based on UBS AG’s internal credit
rating system and year-end stage classification. Under IFRS 9, the credit risk rating reflects UBS AG’s assessment of the
probability of default of individual counterparties, prior to substitutions. The amounts presented are gross of impairment
allowances.
›
Refer to the “Risk management and control” section of this report for more details about UBS AG’s internal grading system
Financial assets subject to credit risk by rating category
USD m
31.12.25
Rating category
1
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total
gross
carrying
amount
ECL
allowances
Net carrying
amount
(maximum
exposure to
credit risk)
Financial assets measured at amortized cost
Cash and balances at central banks
(262 )
of which: stage 1
of which: stage 2
(262 )
of which: stage 3
Amounts due from banks
(14 )
of which: stage 1
(9 )
of which: stage 2
(5 )
of which: stage 3
Receivables from securities financing transactions
(1 )
of which: stage 1
(1 )
Cash collateral receivables on derivative instruments
of which: stage 1
Loans and advances to customers
(3,236 )
of which: stage 1
(352 )
of which: stage 2
(271 )
of which: stage 3
(2,613 )
Other financial assets measured at amortized cost
(122 )
of which: stage 1
(29 )
of which: stage 2
(9 )
of which: stage 3
(84 )
Total financial assets measured at amortized cost
(3,635 )
On-balance sheet financial instruments
Financial assets measured at FVOCI – debt instruments
Total on-balance sheet financial instruments
(3,635 )
1 Refer to the “Internal UBS rating scale and mapping of external ratings” table in the “Risk management and control” section of this report for more information about rating categories.
Off-balance sheet positions subject to expected credit loss by rating category
USD m
31.12.25
Rating category
1
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total carrying
amount
(maximum
exposure to
credit risk)
ECL provision
Off-balance sheet financial instruments
Guarantees
(50 )
of which: stage 1
(15 )
of which: stage 2
(22 )
of which: stage 3
(13 )
Irrevocable loan commitments
(227 )
of which: stage 1
(114 )
of which: stage 2
(77 )
of which: stage 3
(36 )
Forward starting reverse repurchase and securities borrowing agreements
Total off-balance sheet financial instruments
(277 )
Credit lines
Committed unconditionally revocable credit lines
(67 )
of which: stage 1
(51 )
of which: stage 2
(16 )
of which: stage 3
Irrevocable committed prolongation of existing loans
(3 )
of which: stage 1
(3 )
of which: stage 2
of which: stage 3
Total credit lines
(70 )
1 Refer to the “Internal UBS rating scale and mapping of external ratings” table in the “Risk management and control” section of this report for more information about rating categories.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 197
Note 19 Expected credit loss measurement (continued)
Financial assets subject to credit risk by rating category
USD m
31.12.24
Rating category
1
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total gross
carrying
amount
ECL
allowances
Net carrying
amount
(maximum
exposure to
credit risk)
Financial assets measured at amortized cost
Cash and balances at central banks
(186 )
of which: stage 1
of which: stage 2
(186 )
Amounts due from banks
(42 )
of which: stage 1
(1 )
of which: stage 2
(5 )
of which: stage 3
(36 )
Receivables from securities financing transactions
(2 )
of which: stage 1
(2 )
Cash collateral receivables on derivative instruments
of which: stage 1
Loans and advances to customers
(2,830 )
of which: stage 1
(276 )
of which: stage 2
(323 )
of which: stage 3
(2,230 )
Other financial assets measured at amortized cost
(135 )
of which: stage 1
(25 )
of which: stage 2
(7 )
of which: stage 3
(103 )
Total financial assets measured at amortized cost
(3,195 )
On-balance sheet financial instruments
Financial assets measured at FVOCI – debt instruments
Total on-balance sheet financial instruments
(3,195 )
1 Refer to the “Internal UBS rating scale and mapping of external ratings” table in the “Risk management and control” section of this report for more information about rating categories.
Off-balance sheet positions subject to expected credit loss by rating category
USD m
31.12.24
Rating category
1
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total carrying
amount
(maximum
exposure to
credit risk)
ECL provision
Off-balance sheet financial instruments
Guarantees
(61 )
of which: stage 1
(16 )
of which: stage 2
(24 )
of which: stage 3
(22 )
Irrevocable loan commitments
(192 )
of which: stage 1
(105 )
of which: stage 2
(61 )
of which: stage 3
(26 )
Forward starting reverse repurchase and securities borrowing agreements
Total off-balance sheet financial instruments
(253 )
Credit lines
Committed unconditionally revocable credit lines
(75 )
of which: stage 1
(59 )
of which: stage 2
(17 )
of which: stage 3
Irrevocable committed prolongation of existing loans
(3 )
of which: stage 1
(3 )
of which: stage 2
of which: stage 3
Total credit lines
(79 )
1 Refer to the “Internal UBS rating scale and mapping of external ratings” table in the “Risk management and control” section of this report for more information about rating categories.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 198
Note 19 Expected credit loss measurement (continued)
f) Sensitivity information
As outlined in Note 1a, ECL estimates involve significant uncertainties at the time they are made.
ECL models
The models applied to determine point -in-time PD and LGD rely on market and statistical data, which has been found
to correlate well with historically observed defaults in sufficiently homogeneous segments. The risk sensitivities for
each of the ECL report ing segments to such factors are summarized in Note 9.
Climate risk
Climate risk may negatively affect clients or portfolios due to direct or indirect transition costs, or exposure to chronic
and acute physical risks in locations likely to be impacted by climate change. Such effects could lead to a deterioration in
creditworthiness, which in turn would have an impact on ECLs.
Although some macroeconomic indicators used in the current PD models could be influenced by climate change, UBS
currently does not use specific climate risk scenarios in addition to the four general economic scenarios applied to derive
the weighted-average ECL. The rationale for the approach at this point in time is the significance of model risks and the
insufficient level of qualitative and quantitative data necessary for calibration and probability weighting.
Instead, UBS focuses on the process of vetting clients and business transactions, where both physical and transition risks
for selected sensitive portfolios use internally developed, climate assessment models. This review process may lead to a
downward revision of the counterparty’s credit rating or the adoption of risk mitigating actions, impacting the individual
contribution to ECLs.
UBS assesses climate risk impacts across key lending portfolios using a combination of qualitative and quantitative inputs,
including climate scenario analysis and exposures to climate-sensitive sectors, as part of its financial risk materiality
assessment. These assessments rely on conservative climate stress-testing methodologies that differ from ECL models in
assumptions, horizons and calibration, with credit risk impacts primarily arising through indirect macroeconomic effects,
and therefore do not allow a direct inference of impacts on ECL allowances. UBS instead assesses the need for climate-
related ECL adjustments through post-model adjustments. As part of the quarterly ECL governance, climate-related
events, such as landslides, floods and wildfires, are discussed at senior management level, and if required, dedicated post-
model adjustments are booked to increase the model-based ECL allowance levels.
It was assessed that the magnitude of any impact of climate risk on the weighted-average ECL would not be material as
of 31 December 2025. Therefore, no specific post-model adjustment was made in this regard.
›
Refer to the “UBS AG consolidated supplemental disclosures required under SEC regulations” section of this report for more
information about the maturity profile of UBS AG’s core loan book
Forward-looking scenarios
Depending on the scenario selection and related macroeconomic assumptions for the risk factors, the components of
the relevant weighted-average ECL change. This is particularly relevant for interest rates, which can move in both
directions under a given growth assumption, e.g. low growth with high interest rates in a stagflation scenario, versus
low growth and falling interest rates in a recession. Management generally looks for scenario narratives that reflect the
key risk drivers of a given credit portfolio.
As forecasting models are complex, due to multiple factors, simple what-if analyses involving a change of individual
parameters do not necessarily provide realistic information on the exposure of segments to changes in the macroeconomy.
Portfolio-specific analyses based on their key risk factors would also not be meaningful, as potential compensatory effects
in other segments would be ignored. The table below indicates some sensitivities to ECLs, if a key macroeconomic variable
for the forecasting period is amended across all scenarios with all other factors remaining unchanged.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 199
Note 19 Expected credit loss measurement (continued)
Potential effect on stage 1 and stage 2 positions from changing the global key parameters as of 31 December 2025
USD m
100% Baseline
100% Asset price
appreciation
100% Moderate
stagflation crisis
100% Global
trade war
Weighted average
Change in key parameters
Fixed income: Government bonds (absolute change)
–1.00%
(2 )
(2 )
(62 )
(61 )
(11 )
–0.50%
(2 )
(2 )
(34 )
(42 )
(6 )
+0.50%
+1.00%
Unemployment rate (absolute change)
–1.00%
(9 )
(7 )
(25 )
(36 )
(8 )
–0.50%
(5 )
(4 )
(10 )
(20 )
(5 )
+0.50%
+1.00%
Real GDP growth (relative change)
–2.00%
–1.00%
+1.00%
(7 )
(6 )
(20 )
(27 )
(13 )
+2.00%
(15 )
(12 )
(45 )
(60 )
(27 )
House Price Index (relative change)
–5.00%
–2.50%
+2.50%
(6 )
(5 )
(22 )
(97 )
(13 )
+5.00%
(12 )
(9 )
(40 )
(182 )
(25 )
Equity & Commodity Index (relative change)
–10.00%
–5.00%
+5.00%
(2 )
(2 )
(5 )
(3 )
+10.00%
(4 )
(4 )
(3 )
(6 )
(5 )
Equity Volatility (absolute change)
–10.00%
(7 )
(4 )
(11 )
(17 )
(9 )
–5.00%
(4 )
(2 )
(5 )
(9 )
(5 )
+5.00%
+10.00%
Sensitivities can be more meaningfully assessed in the context of coherent scenarios with consistently developed
macroeconomic factors. The table above outlines favorable and unfavorable effects, based on reasonably possible
alternative changes to the economic conditions for stage 1 and stage 2 positions. The ECL impact is calculated for material
portfolios and disclosed for each scenario.
Changes to forecasting timelines may have an effect on ECLs: depending on the cycle, a longer or shorter forecasting
horizon might lead to different annualized lifetime PD and average LGD estimations. This is currently not deemed to be
material for UBS, as a large proportion of loans, including mortgages in Switzerland, have maturities that are within the
forecasting horizon.
Scenario weights and stage allocation
Potential effect on stage 1 and stage 2 positions from changing scenario weights or moving to an ECL lifetime
calculation as of 31 December 2025
Actual ECL allowances
and provisions,
including staging (as
per Note 9)
Pro forma ECL
allowances and
provisions, assuming
all positions are
subject to lifetime ECL
Scenarios
Weighted average
100% Asset price
appreciation
100% Baseline
100% Moderate
stagflation
100% Global
trade war
Weighted average
USD m, except where indicated
Segmentation
Private clients with mortgages
(62 )
(35 )
(38 )
(114 )
(436 )
(215 )
Real estate financing
(60 )
(49 )
(53 )
(108 )
(129 )
(151 )
Large corporate clients
(399 )
(260 )
(306 )
(525 )
(791 )
(664 )
SME clients
(212 )
(195 )
(208 )
(312 )
(493 )
(340 )
Ship financing
(10 )
(9 )
(9 )
(10 )
(14 )
(22 )
Consumer financing / credit cards
(80 )
(74 )
(75 )
(80 )
(87 )
(239 )
Other segments
(415 )
(409 )
(413 )
(442 )
(469 )
(514 )
Total
(1,237 )
(1,030 )
(1,102 )
(1,591 )
(2,418 )
(2,146 )
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 200
Note 19 Expected credit loss measurement (continued)
Potential effect on stage 1 and stage 2 positions from changing scenario weights or moving to an ECL lifetime
calculation as of 31 December 2024
Actual ECL
allowances and
provisions,
including staging
(as per Note 9)
Pro forma ECL
allowances and
provisions,
assuming all
positions are
subject to lifetime
ECL
Scenarios
Weighted average
100% Baseline
100%
Stagflationary
geopolitical crisis
100% Mild debt
crisis
Weighted average
USD m, except where indicated
Segmentation
Private clients with mortgages
(118 )
(43 )
(718 )
(68 )
(408 )
Real estate financing
(57 )
(40 )
(164 )
(49 )
(185 )
Large corporate clients
(377 )
(247 )
(757 )
(401 )
(673 )
SME clients
(180 )
(151 )
(259 )
(223 )
(327 )
Ship financing
(24 )
(27 )
(42 )
(28 )
(78 )
Consumer financing / credit cards
(58 )
(63 )
(72 )
(65 )
(168 )
Other segments
(295 )
(246 )
(370 )
(283 )
(395 )
Total
(1,110 )
(818 )
(2,381 )
(1,116 )
(2,234 )
Scenario weights
ECL is sensitive to changing scenario weights, in particular if narratives and parameters are selected that are not close to
the baseline scenario, highlighting the non-linearity of credit losses.
As shown in the table above, the ECLs for stage 1 and stage 2 positions would have been USD
m (31 December
2024: USD
m) instead of USD
m (31 December 2024: USD
m) if ECLs had been determined solely on the
baseline scenario
. The weighted-average ECL therefore amounted to
% (31 December 2024:
%) of the baseline
value. The effects of weighting each of the four scenarios 100% are shown in the table above.
Stage allocation and SICR
The determination of what constitutes an SICR is based on management judgment, as explained in Note 1a. Changing
the SICR trigger will have a direct effect on ECLs, as more or fewer positions would be subject to lifetime ECLs under any
scenario.
The impact of the SICR trigger on overall ECL is demonstrated in the table above with the indication that the ECL
allowances and provisions for stage 1 and stage 2 positions would have been USD
m, if all non-impaired positions
across the portfolio had been measured for lifetime ECLs irrespective of their actual SICR status. This amount compares
with actual stage 1 and 2 allowances and provisions of USD
m as of 31 December 2025.
Maturity profile
The maturity profile is an important driver in ECLs, in particular for transactions in stage 2. A transfer of a transaction
into stage 2 may therefore have a significant effect on ECLs. The current maturity profile of most lending books is relatively
short.
Lending to large corporate clients is generally between one and two years, with related loan commitments up to four
years. Real estate lending is generally between two and three years in Switzerland, with long-dated maturities in the US.
Lombard-lending contracts typically have average contractual maturities of 12 months or less, and include callable
features.
A significant portion of UBS AG’s lending to SME clients and real estate financing is documented under multi-purpose
credit agreements, which allow for various forms of utilization but are unconditionally cancelable by UBS at any time:
(i) for drawings under such agreements with a fixed maturity, the respective term is applied for ECL calculations, or a
maximum of 12 months in stage
1; (ii) for unused credit lines and all drawings that have no fixed maturity (e.g. current
accounts), UBS generally applies a 12-month maturity from the reporting date, given the credit review policies, which
require either continuous monitoring of key indicators and behavioral patterns for smaller positions or an annual formal
review for any other limit. The ECLs for these products are sensitive to shortening or extending the maturity assumption.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 201
Note 20 Fair value measurement
a) Valuation principles
All financial and non-financial assets and liabilities measured or disclosed at fair value are categorized into one of three
fair value hierarchy levels in accordance with IFRS Accounting Standards. The fair value hierarchy is based on the
transparency of inputs to the valuation of an asset or liability as of the measurement date. In certain cases, the inputs
used to measure fair value may fall within different levels of the fair value hierarchy. For disclosure purposes, the level in
the hierarchy within which an instrument is classified in its entirety is based on the lowest level input that is significant to
the position’s fair value measurement:
–
Level 1 – quoted prices (unadjusted) in active markets for identical assets and liabilities;
–
Level 2 – valuation techniques for which all significant inputs are, or are based on, observable market data; or
–
Level 3 – valuation techniques for which significant inputs are not based on observable market data.
Fair values are determined using quoted prices in active markets for identical assets or liabilities, where available. Where
the market for a financial instrument or non-financial asset or liability is not active, fair value is established using a
valuation technique, including pricing models. Valuation adjustments may be made to allow for additional factors,
including model, liquidity, credit and funding risks, which are not explicitly captured within the valuation technique, but
which would nevertheless be considered by market participants when establishing a price. The limitations inherent in a
particular valuation technique are considered in the determination of the classification of an asset or liability within the
fair value hierarchy. Generally, the unit of account for a financial instrument is the individual instrument, and UBS AG
applies valuation adjustments at an individual instrument level, consistent with that unit of account. However, if certain
conditions are met, UBS AG may estimate the fair value of a portfolio of financial assets and liabilities with substantially
similar and offsetting risk exposures on the basis of the net open risks.
›
Refer to Note 20d for more information
b) Valuation governance
UBS AG’s fair value measurement and model governance framework includes numerous controls and other procedural
safeguards that are intended to maximize the quality of fair value measurements reported in the financial statements.
New products and valuation techniques must be reviewed and approved by key stakeholders from the risk and finance
control functions. Responsibility for the ongoing measurement of financial and non-financial instruments at fair value is
with the business divisions.
Fair value estimates are validated by the risk and finance control functions, which are independent of the business
divisions. Independent price verification is performed by Finance through benchmarking the business divisions’ fair value
estimates with observable market prices and other independent sources. A governance framework and associated
controls are in place to monitor the quality of third-party pricing sources, where used. For instruments where valuation
models are used to determine fair value, independent valuation and model control groups within Finance and Risk Control
evaluate UBS AG’s models on a regular basis, including valuation and model input parameters, as well as pricing. As a
result of the valuation controls employed, valuation adjustments may be made to the business divisions’ estimates of fair
value to align with independent market data and the relevant accounting standard.
›
Refer to Note 20d for more information
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 202
Note 20 Fair value measurement (continued)
c) Fair value hierarchy
The table below provides the fair value hierarchy classification of financial and non-financial assets and liabilities measured
at fair value. The narrative that follows describes valuation techniques used in measuring the fair value of different
product types (including significant valuation inputs and assumptions used) and the factors considered in determining
their classification within the fair value hierarchy.
During 2025, there were no material transfers of assets or liabilities between Level 1 and Level 2 that were held for the
entire reporting period.
Determination of fair values from quoted market prices or valuation techniques
1
31.12.25
31.12.24
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value on a recurring basis
Financial assets at fair value held for trading
of which: Equity instruments
of which: Government bills / bonds
of which: Investment fund units
of which: Corporate and municipal bonds
of which: Loans
of which: Asset-backed securities
Derivative financial instruments
of which: Foreign exchange
of which: Interest rate
of which: Equity / index
of which: Credit
of which: Commodities
Brokerage receivables
Financial assets at fair value not held for trading
of which: Financial assets for unit-linked investment contracts
of which: Corporate and municipal bonds
of which: Government bills / bonds
of which: Loans
of which: Securities financing transactions
of which: Asset-backed securities
of which: Auction rate securities
of which: Investment fund units
of which: Equity instruments
Financial assets measured at fair value through other comprehensive income on a recurring basis
Financial assets measured at fair value through other comprehensive income
of which: Government bills / bonds
of which: Commercial paper and certificates of deposit
of which: Corporate and municipal bonds
Non-financial assets measured at fair value on a recurring basis
Precious metals and other physical commodities
Non-financial assets measured at fair value on a non-recurring basis
Other non-financial assets
2
Total assets measured at fair value
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 203
Note 20 Fair value measurement (continued)
Determination of fair values from quoted market prices or valuation techniques (continued)
1
31.12.25
31.12.24
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial liabilities measured at fair value on a recurring basis
Financial liabilities at fair value held for trading
of which: Equity instruments
of which: Corporate and municipal bonds
of which: Government bills / bonds
of which: Investment fund units
Derivative financial instruments
of which: Foreign exchange
of which: Interest rate
of which: Equity / index
of which: Credit
of which: Commodities
of which: Loan commitments measured at FVTPL
Financial liabilities designated at fair value on a recurring basis
Brokerage payables designated at fair value
Debt issued designated at fair value
Other financial liabilities designated at fair value
of which: Financial liabilities related to unit-linked investment contracts
of which: Securities financing transactions
of which: Funding from UBS Group AG
of which: Over-the-counter debt instruments
and others
Total liabilities measured at fair value
1 Bifurcated embedded derivatives are presented on the same balance sheet lines as their host contracts and are not included in this table. The fair value of these derivatives was not material for the periods presented.
2 Other non-financial assets primarily consist of properties and other non-current assets held for sale, which are measured at the lower of their net carrying amount or fair value less costs to sell.
Valuation techniques
UBS AG uses widely recognized valuation techniques for determining the fair value of financial and non-financial
instruments that are not actively traded and quoted. The most frequently applied valuation techniques include discounted
value of expected cash flows, relative value and option pricing methodologies.
Discounted value of expected cash flows is a valuation technique that measures fair value using expected future cash
flows from assets or liabilities and then discounts these cash flows using a discount rate or discount margin that reflects
the credit and / or funding spreads required by the market for instruments with similar risk and liquidity profiles to produce
a present value. When using such valuation techniques, expected future cash flows are estimated using an observed or
implied market price for the future cash flows or by using industry-standard cash flow projection models. The discount
factors within the calculation are generated using industry-standard yield curve modeling techniques and models.
Relative value models measure fair value based on the market prices of equivalent or comparable assets or liabilities, making
adjustments for differences between the characteristics of the observed instrument and the instrument being valued.
Option pricing models incorporate assumptions regarding the behavior of future price movements of an underlying
referenced asset or assets to generate a probability-weighted future expected payoff for the option. The resulting
probability-weighted expected payoff is then discounted using discount factors generated from industry-standard yield
curve modeling techniques and models. The option pricing model may be implemented using a closed-form analytical
formula or other mathematical techniques (e.g. binomial tree or Monte Carlo simulation).
Where available, valuation techniques use market-observable assumptions and inputs. If such data is not available, inputs
may be derived by reference to similar assets in active markets, from recent prices for comparable transactions or from
other observable market data. In such cases, the inputs selected are based on historical experience and practice for similar
or analogous instruments, derivation of input levels based on similar products with observable price levels, and knowledge
of current market conditions and valuation approaches. Where relevant, these inputs include assumptions about climate
risk and relevant geopolitical risks.
For more complex instruments, fair values may be estimated using a combination of observed transaction prices,
consensus pricing services and relevant quotes. Consideration is given to the nature of the quotes (e.g. indicative or firm)
and the relationship of recently evidenced market activity to the prices provided by consensus pricing services. UBS AG
also uses internally developed models, which are typically based on valuation methods and techniques recognized as
standard within the industry. Assumptions and inputs used in valuation techniques include benchmark interest rate curves,
credit and funding spreads used in estimating discount rates, bond and equity prices, equity index prices, foreign
exchange rates, levels of market volatility and correlation. Refer to Note 20e for more information. The discount curves
used by UBS AG incorporate the funding and credit characteristics of the instruments to which they are applied.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 204
Note 20 Fair value measurement (continued)
Financial instruments excluding derivatives: valuation and classification in the fair value hierarchy
Product
Valuation and classification in the fair value hierarchy
Government bills
and bonds
Valuation
–
Generally valued using prices obtained directly from the market.
–
Instruments not priced directly using active-market data are valued using discounted cash flow valuation
techniques that incorporate market data for similar government instruments.
Fair value
hierarchy
–
Generally traded in active markets with prices that can be obtained directly from these markets, resulting
in classification as Level 1, while the remaining positions are classified as Level 2 or Level 3.
Corporate and
municipal bonds
Valuation
–
Generally valued using prices obtained directly from the market for the security, or similar securities,
adjusted for seniority, maturity and liquidity.
–
When prices are not available, instruments are valued using discounted cash flow valuation techniques
incorporating the credit spread of the issuer or similar issuers.
–
For convertible bonds without directly comparable prices, issuances may be priced using a convertible
bond model.
Fair value
hierarchy
–
Generally classified as Level 1 or Level 2, depending on the depth of trading activity behind price sources.
–
Level 3 instruments have no suitable pricing information available.
Traded loans and
loans measured at
fair value
Valuation
–
Valued directly using market prices that reflect recent transactions or quoted dealer prices, where available.
–
Where no market price data is available, loans are valued by relative value benchmarking using pricing
derived from debt instruments in comparable entities or different products in the same entity, or by using
a credit default swap valuation technique, which requires inputs for credit spreads, credit recovery rates
and interest rates.
–
Securitization lending facilities are valued using a discounted cash flow analysis that incorporates
adjustments for any bespoke features of the loan and collateral. Recently originated commercial real estate
loans are measured using a securitization approach based on rating agency guidelines.
Fair value
hierarchy
–
Instruments with suitably deep and liquid pricing information are classified as Level 2.
–
Positions requiring the use of valuation techniques, or for which the price sources have insufficient trading
depth, are classified as Level 3.
Investment fund
units
Valuation
–
Predominantly exchange-traded, with readily available quoted prices in liquid markets. Where market
prices are not available, fair value may be measured using net asset values (NAVs).
Fair value
hierarchy
–
Listed units are classified as Level 1, provided there is sufficient trading activity to justify active-market
classification, while other positions are classified as Level 2.
–
Positions for which NAVs are not available, or where the unit or underlying investments are illiquid, are
classified as Level 3.
Asset-backed
securities (ABS)
Valuation
–
For liquid securities, the valuation process will use trade and price data, updated for movements in market
levels between the time of trading and the time of valuation. Less liquid instruments are measured using
discounted expected cash flows incorporating price data for instruments or indices with similar risk profiles.
Fair value
hierarchy
–
Residential mortgage-backed securities, commercial mortgage-backed securities and other ABS are
generally classified as Level 2 when reliable external price quotes are available. However, if significant
inputs are unobservable, or if market or fundamental data is not available, they are classified as Level 3.
Auction rate
securities (ARS)
Valuation
–
ARS are valued utilizing a discounted cash flow methodology. The model captures interest rate risk
emanating from the note coupon, credit risk attributable to the underlying closed-end fund investments,
liquidity risk as a function of the level of trading volume in these positions, and extension risk, as ARS are
perpetual instruments that require an assumption regarding their maturity or issuer redemption date.
Fair value
hierarchy
–
Granular and liquid pricing information is generally not available for ARS. As a result, these securities are
classified as Level 3.
Equity instruments
Valuation
–
Listed equity instruments are generally valued using prices obtained directly from the market.
–
Unlisted equity holdings, including private equity positions, are initially marked at their transaction price
and are revalued when reliable evidence of price movement becomes available or when the position is
deemed to be impaired.
Fair value
hierarchy
–
The majority of equity securities are actively traded on public stock exchanges where quoted prices are
readily and regularly available, resulting in Level 1 classification.
–
Equity securities less actively traded will be classified as Level 2 and illiquid positions as Level 3.
Financial assets for
unit-linked
investment
contracts
Valuation
–
The majority of assets are listed on exchanges and fair values are determined using quoted prices.
Fair value
hierarchy
–
Most assets are classified as Level 1 if actively traded, or Level 2 if trading is not active.
–
Instruments for which prices are not readily available are classified as Level 3.
Securities
financing
transactions
Valuation
–
These instruments are valued using discounted expected cash flow techniques. The discount rate applied
is based on funding curves that are relevant to the collateral eligibility terms.
Fair value
hierarchy
–
Collateral funding curves for these instruments are generally observable and, as a result, these positions
are classified as Level 2.
–
Where the collateral terms are non-standard, the funding curve may be considered unobservable, and
these positions are classified as Level 3.
Brokerage
receivables and
payables
Valuation
–
Fair value is determined based on the value of the underlying balances.
Fair value
hierarchy
–
Due to their on-demand nature, these receivables and payables are deemed as Level 2.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 205
Note 20 Fair value measurement (continued)
Product
Valuation and classification in the fair value hierarchy
Financial liabilities
related to unit-
linked investment
contracts
Valuation
–
The fair values of investment contract liabilities are determined by reference to the fair value of the
corresponding assets.
Fair value
hierarchy
–
The liabilities themselves are not actively traded but are mainly referenced to instruments that are
actively traded and are therefore classified as Level 2.
Precious metals and
other physical
commodities
Valuation
–
Physical assets are valued using the spot rate observed in the relevant market.
Fair value
hierarchy
–
Generally traded in active markets with prices that can be obtained directly from these markets, resulting
in classification as Level 1.
Debt issued
designated at fair
value
Valuation
–
The risk management and the valuation approaches for these instruments are closely aligned with the
equivalent derivatives business and the underlying risk, and the valuation techniques used for this
component are the same as the relevant valuation techniques described below.
Fair value
hierarchy
–
The observability is closely aligned with the equivalent derivatives business and the underlying risk.
Commercial paper
and certificates of
deposit
Valuation
–
Generally valued using discounted cash flow valuation techniques incorporating the spread of the issuer
or similar issuers over the underlying currency risk-free curve.
Fair value
hierarchy
–
Due to the short-dated nature of the positions and liquid underlying pricing inputs, they are generally
classified as Level 2.
Derivative instruments: valuation and classification in the fair value hierarchy
The curves used for discounting expected cash flows in the valuation of collateralized derivatives reflect the funding terms
associated with the relevant collateral arrangement for the instrument being valued. These collateral arrangements differ
across counterparties with respect to the eligible currency and interest terms of the collateral. The majority of
collateralized derivatives are measured using a discount curve based on funding rates derived from overnight interest in
the cheapest eligible currency for the respective counterparty collateral agreement.
Uncollateralized and partially collateralized derivatives are discounted using the alternative reference rate (the ARR) (or
equivalent) curve for the currency of the instrument. As described in Note 20d, the fair value of uncollateralized and
partially collateralized derivatives is then adjusted by credit valuation adjustments (CVAs), debit valuation adjustments
(DVAs) and funding valuation adjustments (FVAs), as applicable, to reflect an estimation of the effect of counterparty
credit risk, UBS AG’s own credit risk, and funding costs and benefits.
›
Refer to Note 10 for more information about derivative instruments
Derivative product
Valuation and classification in the fair value hierarchy
Interest rate
contracts
Valuation
–
Interest rate swap contracts are valued by estimating future interest cash flows and discounting those cash
flows using a rate that reflects the appropriate funding rate for the position being measured. The yield
curves used to estimate future index levels and discount rates are generated using market-standard yield
curve models using interest rates associated with current market activity. The key inputs to the models are
interest rate swap rates, forward rate agreement rates, short-term interest rate futures prices, basis swap
spreads and inflation swap rates.
–
Interest rate option contracts are valued using various market-standard option models, using inputs that
include interest rate yield curves, inflation curves, volatilities and correlations.
–
When the maturity of an interest rate swap or option contract exceeds the term for which standard market
quotes are observable for a significant input parameter, the contracts are valued by extrapolation from the
last observable point using standard assumptions or by reference to another observable comparable input
parameter to represent a suitable proxy for that portion of the term.
Fair value
hierarchy
–
The majority of interest rate swaps are classified as Level 2, as the standard market contracts that form the
inputs for yield curve models are generally traded in active and observable markets.
–
Options are generally treated as Level 2, as the calibration process enables the model output to be validated
to active-market levels. Models calibrated in this way are then used to revalue the portfolio of both standard
options and more exotic products.
–
Interest rate swap or option contracts are classified as Level 3 when the terms exceed standard market-
observable quotes.
–
Exotic options for which appropriate volatility or correlation input levels cannot be implied from observable
market data are classified as Level 3.
Credit derivative
contracts
Valuation
–
Credit derivative contracts are valued using industry-standard models based primarily on market credit
spreads, credit volatility, upfront pricing points and implied recovery rates. Where a derivative credit spread
is not directly available, it may be derived from the price of the reference cash bond.
–
Asset-backed credit derivatives are valued using a valuation technique similar to that of the underlying
security with an adjustment to reflect the funding differences between cash and synthetic form.
Fair value
hierarchy
–
Single-entity and portfolio credit derivative contracts are classified as Level 2 when credit spreads, credit
volatility and recovery rates are determined from actively traded observable market data. Where the
underlying reference name(s) are not actively traded and the correlation cannot be directly mapped to
actively traded tranche instruments, these contracts are classified as Level 3.
–
Asset-backed credit derivatives follow the characteristics of the underlying security and are therefore
distributed across Level 2 and Level 3.
Annual Report 2025
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Note 20 Fair value measurement (continued)
Derivative product
Valuation and classification in the fair value hierarchy
Foreign exchange
contracts
Valuation
–
Open spot foreign exchange (FX) contracts are valued using the FX spot rate observed in the market.
–
Forward FX contracts are valued using the FX spot rate adjusted for forward pricing points observed from
standard market-based sources.
–
Over-the-counter (OTC) FX option contracts are valued using market-standard option valuation models.
The models used for shorter-dated options (i.e. maturities of five years or less) tend to be different from
those used for longer-dated options because the models needed for longer-dated OTC FX contracts require
additional consideration of interest rate and FX rate interdependency.
–
The valuation for multi-dimensional FX options uses a multi-local volatility model, which is calibrated to the
observed FX volatilities for all relevant FX pairs.
Fair value
hierarchy
–
The markets for FX spot and FX forward pricing points are both actively traded and observable and,
therefore, such FX contracts are generally classified as Level 2.
–
A significant proportion of OTC FX option contracts are classified as Level 2 as inputs are derived mostly
from standard market contracts traded in active and observable markets.
Equity / index
contracts
Valuation
–
Equity forward contracts have a single stock or index underlying and are valued using market-standard
models. The key inputs to the models are stock prices, estimated dividend rates and equity funding rates
(which are implied from prices of forward contracts observed in the market). Estimated cash flows are then
discounted using market-standard discounted cash flow models using a rate that reflects the appropriate
funding rate for that portion of the portfolio. When no market data is available for the instrument maturity,
they are valued by extrapolation of available data, use of historical dividend data, or use of data for a
related equity.
–
Equity option contracts are valued using market-standard models that estimate the equity forward level as
described for equity forward contracts and incorporate inputs for stock volatility and for correlation
between stocks within a basket. The probability-weighted expected option payoff generated is then
discounted using market-standard discounted cash flow models applying a rate that reflects the
appropriate funding rate for that portion of the portfolio. When volatility, forward or correlation inputs are
not available, they are valued using extrapolation of available data, historical dividend, correlation or
volatility data, or the equivalent data for a related equity.
Fair value
hierarchy
–
As inputs are derived mostly from standard market contracts traded in active and observable markets, a
significant proportion of equity forward contracts are classified as Level 2.
–
Equity option positions for which inputs are derived from standard market contracts traded in active and
observable markets are also classified as Level 2. Level 3 positions are those for which volatility, forward or
correlation inputs are not observable.
Commodity
contracts
Valuation
–
Commodity forward and swap contracts are measured using market-standard models that use market
forward levels on standard instruments.
–
Commodity option contracts are measured using market-standard option models that estimate the
commodity forward level as described for commodity forward and swap contracts, incorporating inputs
for the volatility of the underlying index or commodity. For commodity options on baskets of commodities
or bespoke commodity indices, the valuation technique also incorporates inputs for the correlation
between different commodities or commodity indices.
Fair value
hierarchy
–
Individual commodity contracts are typically classified as Level 2, because active forward and volatility
market data is available.
Loan commitments
measured at FVTPL
Valuation
–
Valued directly using market prices that reflect recent transactions or quoted dealer prices, where available.
–
Where no market price data is available, loan commitments are valued by relative value benchmarking
using pricing derived from debt instruments in comparable entities or different products in the same entity,
or by using a credit default swap valuation technique, which requires inputs for credit spreads, credit
recovery rates and interest rates.
Fair value
hierarchy
–
Instruments with suitably deep and liquid pricing information are classified as Level 2.
–
Positions requiring the use of valuation techniques, or for which the price sources have insufficient trading
depth, are classified as Level 3.
d) Valuation adjustments and other items
The output of a valuation technique is always an estimate of a fair value that cannot be measured with complete certainty.
As a result, valuations are adjusted where appropriate and when such factors would be considered by market participants
in estimating fair value, to reflect close-out costs, credit exposure, model-driven valuation uncertainty, funding costs and
benefits, trading restrictions and other factors.
Deferred day-1 profit or loss reserves
For new transactions where the valuation technique used to measure fair value requires significant inputs that are not
based on observable market data, the financial instrument is initially recognized at the transaction price. The transaction
price may differ from the fair value obtained using a valuation technique, where any such difference is deferred and not
initially recognized in the income statement.
Deferred day-1 profit or loss is generally released into
Other net income from financial instruments measured at fair value
through profit or loss
the transaction is closed out.
The table below summarizes the changes in deferred day-1 profit or loss reserves during the respective period.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 207
Note 20 Fair value measurement (continued)
Deferred day-1 profit or loss reserves
USD m
2025
2024
2023
Reserve balance at the beginning of the year
Profit / (loss) deferred on new transactions
(Profit) / loss recognized in the income statement
(271 )
(215 )
(275 )
Foreign currency translation
(2 )
(6 )
Reserve balance at the end of the year
Own credit
Own credit risk is reflected in the valuation of UBS AG’s financial liabilities designated at fair value through profit or loss
where this component is considered relevant for valuation purposes by UBS AG’s counterparties and other market
participants.
Changes in the fair value of financial liabilities designated at fair value through profit or loss related to own credit are
recognized in
Other comprehensive income
directly within
,
with no reclassification to the income
statement in future periods. This presentation does not create or increase an accounting mismatch in the income
statement, as UBS AG does not hedge changes in own credit.
Gains and losses on own credit are estimated using own credit adjustment (OCA) curves, which incorporate observable
market data, including market-observed secondary prices for UBS AG’s debt and debt curves of its peers. In the table
below, the change in unrealized own credit consists of changes in fair value that are attributable to the change in
UBS AG’s credit spreads, as well as the effect of changes in fair values attributable to factors other than credit spreads,
such as redemptions, effects from time decay and changes in interest and other market rates. Realized own credit is
recognized when an instrument with an associated unrealized OCA is repurchased prior to the contractual maturity date.
Life-to-date amounts reflect the cumulative unrealized change since initial recognition.
›
Refer to Note 15 for more information about debt issued designated at fair value
Own credit adjustments on financial liabilities designated at fair value
For the year ended
USD m
31.12.25
31.12.24
31.12.23
Recognized during the period:
Realized gain / (loss)
(51 )
(50 )
Unrealized gain / (loss)
(519 )
(891 )
(869 )
Total gain / (loss), before tax
(569 )
(941 )
(861 )
of which: recognized during the period and disclosed in the Statement of comprehensive income
(569 )
(861 )
of which: recognized upon the merger of UBS AG and Credit Suisse AG in retained earnings
(1,016 )
USD m
31.12.25
31.12.24
31.12.23
Recognized on the balance sheet as of the end of the period:
Unrealized life-to-date gain / (loss)
(1,733 )
(1,165 )
(312 )
of which: debt issued designated at fair value
(1,014 )
(780 )
(208 )
of which: other financial liabilities designated at fair value
(719 )
(385 )
(105 )
Credit valuation adjustments
When measuring the fair value of OTC derivative instruments, including funded derivative instruments that are classified
as
Financial assets at fair value not held for trading
, CVAs are applied to reflect the credit risk of the counterparty inherent
in these instruments. This amount represents the estimated fair value of protection required to hedge the counterparty
credit risk of such instruments. A CVA is determined for each counterparty, considering all exposures with that
counterparty, and is dependent on the expected future value of exposures, default probabilities and recovery rates,
applicable collateral or netting arrangements, break clauses, funding spreads, and other contractual factors.
Funding valuation adjustments
Uncollateralized FVAs reflect the costs and benefits of funding associated with uncollateralized and partially collateralized
derivative receivables and payables and are calculated as the valuation effect from moving the discounting of the
uncollateralized derivative cash flows from the ARR to OCA using the CVA framework, including the probability of
counterparty default. An FVA is also applied to collateralized derivative assets in cases where the collateral cannot be sold
or repledged and in cases where collateral agreements contain optionality regarding the type of collateral that can be
pledged or received.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 208
Note 20 Fair value measurement (continued)
Debit valuation adjustments
A DVA is estimated to incorporate own credit in the valuation of derivatives where an FVA is not already recognized. The
DVA calculation is effectively consistent with the CVA framework, being determined for each counterparty, considering
all exposures with that counterparty and taking into account collateral netting agreements, expected future mark-to-
market movements and UBS AG’s credit default spreads.
Other valuation adjustments
Instruments that are measured as part of a portfolio of combined long and short positions are valued at mid-market levels
to ensure consistent valuation of the long- and short-component risks. A liquidity valuation adjustment is then applied
to the overall net long or short exposure to move the fair value to bid or offer as appropriate, reflecting current levels of
market liquidity. The bid–offer spreads used in the calculation of this valuation adjustment are obtained from market
transactions and other relevant sources and are updated periodically.
Uncertainties associated with the use of model-based valuations are incorporated into the measurement of fair value
through the use of model reserves. These reserves reflect the amounts that UBS AG estimates should be adjusted from
valuations produced directly by models to incorporate uncertainties in the relevant modeling assumptions, in the model
and market inputs used, or in the calibration of the model output to adjust for known model deficiencies. In arriving at
these estimates, UBS AG considers a range of market practices, including how it believes market participants would
assess these uncertainties. Model reserves are reassessed periodically in light of data from market transactions, consensus
pricing services and other relevant sources.
Other valuation adjustment reserves on the balance sheet
As of
USD m
31.12.25
31.12.24
Credit valuation adjustments
1
(29 )
(125 )
Funding and debit valuation adjustments
(50 )
(96 )
Other valuation adjustments
(740 )
(1,206 )
of which: liquidity
(523 )
(746 )
of which: model uncertainty
(217 )
(460 )
1 Amount does not include reserves against defaulted counterparties.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 209
Note 20 Fair value measurement (continued)
e) Level 3 instruments: valuation techniques and inputs
The table below presents material Level 3 assets and liabilities, together with the valuation techniques used to measure
fair value, the inputs used in a given valuation technique that are considered significant as of 31 December 2025 and
unobservable, and a range of values for those unobservable inputs.
The range of values represents the highest- and lowest-level inputs used in the valuation techniques. Therefore, the range
does not reflect the level of uncertainty regarding a particular input or an assessment of the reasonableness of UBS AG’s
estimates and assumptions, but rather the different underlying characteristics of the relevant assets and liabilities held by
UBS AG. The ranges will therefore vary from period to period and parameter to parameter based on characteristics of
the instruments held at each balance sheet date. Furthermore, the ranges of unobservable inputs may differ across other
financial institutions, reflecting the diversity of the products in each firm’s inventory.
Valuation techniques and inputs used in the fair value measurement of Level 3 assets and liabilities
Fair value
Significant
unobservable
input(s)
1
Range of inputs
Assets
Liabilities
Valuation
technique(s)
31.12.25
31.12.24
USD bn
31.12.25
31.12.24
31.12.25
31.12.24
low
high
weighted
average
2
low
high
weighted
average
2
unit
1
Financial instruments other than derivative financial instruments
Corporate and municipal
bonds
Relative value to
market comparable
Bond price equivalent
points
Loans at fair value (held
for trading and not held
for trading) and
guarantees
3
Relative value to
market comparable
Loan price equivalent
points
Discounted expected
cash flows
Credit spread
basis
points
Market comparable
and securitization
model
Credit spread
basis
points
Asset-backed securities
Relative value to
market comparable
Bond price equivalent
points
Investment fund units
4
Relative value to
market comparable
Net asset value
Equity instruments
4
Relative value to
market comparable
Price
Securities financing
transactions
Discounted expected
cash flows
Funding spread
basis
points
Debt issued designated at
fair value and Other
financial liabilities
designated at fair value
3
Derivative financial instruments
Interest rate
Option model
Volatility of interest
rates
basis
points
Credit
Discounted expected
cash flows
Credit spreads
basis
points
Recovery rates
%
Option model
Recovery rates
%
Equity / index
Option model
Equity dividend yields
%
Volatility of equity
stocks, equity and
other indices
%
Equity-to-FX
correlation
(65 )
(65 )
%
Equity-to-equity
correlation
(10 )
%
Loan commitments
measured at FVTPL
Relative value to
market comparable
Loan price equivalent
points
1 The ranges of significant unobservable inputs are represented in points, percentages and basis points. Points are a percentage of par (e.g. 100 points would be 100% of par). 2 Weighted averages are provided
for most non-derivative financial instruments and were calculated by weighting inputs based on the fair values of the respective instruments. Weighted averages are not provided for inputs related to Securities
financing transactions and Derivative financial instruments, as this would not be meaningful. 3 Excludes securities financing transactions. Debt issued designated at fair value and Other financial liabilities designated
at fair value primarily consists of UBS AG structured notes, which include variable maturity notes with various equity and foreign exchange underlying risks, as well as rates-linked and credit-linked notes, all of which
have embedded derivative parameters that are considered to be unobservable. The derivative instrument parameters for debt issued designated at fair value, embedded derivatives for over-the-counter debt instruments
reported under Other financial liabilities designated at fair value and funded derivatives reported under Loans at fair value (held for trading and not held for trading) are presented in the corresponding derivative
financial instruments lines in this table. 4 The range of inputs is not disclosed, as there is a dispersion of values given the diverse nature of the investments.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 210
Note 20 Fair value measurement (continued)
Significant unobservable inputs in Level 3 positions
This section discusses the significant unobservable inputs used in the valuation of Level 3 instruments and assesses the
potential effect that a change in each unobservable input in isolation may have on a fair value measurement. Relationships
between observable and unobservable inputs have not been included in the summary below.
Input
Description
Bond price
equivalent
–
Where market prices are not available for a bond, fair value is measured by comparison with observable pricing data from
similar instruments. Factors considered when selecting comparable instruments include credit quality, maturity and industry
of the issuer. Fair value may be measured either by a direct price comparison or by conversion of an instrument price into a
yield (either as an outright yield or as a spread to the relevant benchmark rate).
–
For corporate and municipal bonds, the range represents the range of prices from reference issuances used in determining
fair value. Bonds priced at 0 are distressed to the point that no recovery is expected, while prices significantly in excess of
100 or par relate to inflation-linked or structured issuances that pay a coupon in excess of the market benchmark as of the
measurement date.
–
For credit derivatives, the bond price range represents the range of prices used for reference instruments, which are typically
converted to an equivalent yield or credit spread as part of the valuation process.
Loan price
equivalent
–
Where market prices are not available for a traded loan or a loan commitment, fair value is measured by comparison with
observable pricing data for similar instruments. Factors considered when selecting comparable instruments include industry
segment, collateral quality, maturity and issuer-specific covenants. Fair value may be measured either by a direct price
comparison or by conversion of an instrument price into a yield. The range represents the range of prices derived from
reference issuances of a similar credit quality used to measure fair value for loans classified as Level 3. Loans priced at 0 are
distressed to the point that no recovery is expected, while a current price of 100 represents a loan that is expected to be
repaid in full.
Credit spread
–
Valuation models for many credit derivatives and other credit-sensitive products require an input for the credit spread, which
is a reflection of the credit quality of the associated referenced underlying. The credit spread of a particular security is quoted
in relation to the yield on a benchmark security or reference rate, typically either US Treasury or ARR, and is generally
expressed in terms of basis points. An increase / (decrease) in credit spread will increase / (decrease) the value of credit
protection offered by credit default swaps and other credit derivative products. The income statement effect from such
changes depends on the nature and direction of the positions held. Credit spreads may be negative where the asset is more
creditworthy than the benchmark against which the spread is calculated. A wider credit spread represents decreasing
creditworthiness. The range represents a diverse set of underlyings, with the lower end of the range representing credits of
the highest quality and the upper end of the range representing greater levels of credit risk.
Funding spread
–
Structured financing transactions are valued using synthetic funding curves that best represent the assets that are pledged
as collateral for the transactions. They are not representative of where UBS AG can fund itself on an unsecured basis but
provide an estimate of where UBS AG can source and deploy secured funding with counterparties for a given type of
collateral. The funding spreads are expressed in terms of basis points, and if funding spreads widen, this increases the effect
of discounting.
–
A small proportion of structured debt instruments and non-structured fixed-rate bonds within financial liabilities designated
at fair value had an exposure to funding spreads that was longer in duration than the actively traded market.
Volatility
–
Volatility measures the variability of future prices for a particular instrument and is generally expressed as a percentage,
where a higher number reflects a more volatile instrument, for which future price movements are more likely to occur.
Volatility is a key input into option models, where it is used to derive a probability-based distribution of future prices for the
underlying instrument. The effect of volatility on individual positions within the portfolio is driven primarily by whether the
option contract is a long or short position. In most cases, the fair value of an option increases as a result of an increase in
volatility and is reduced by a decrease in volatility. Generally, volatility used in the measurement of fair value is derived from
active-market option prices (referred to as implied volatility). A key feature of implied volatility is the volatility “smile” or
“skew”, which represents the effect of pricing options of different option strikes at different implied volatility levels.
–
Volatilities of low interest rates tend to be much higher than volatilities of high interest rates. In addition, different currencies
may have significantly different implied volatilities.
Recovery rate
–
The projected recovery rate reflects the estimated recovery that will be realized given expected defaults; it is an analogous
pricing input for corporate or sovereign credits. Reduction in recovery rates will result in lower expected cash flows into the
structure upon the default of the instruments. In general, a significant increase / (decrease) in the recovery rate in isolation
would result in significantly higher / (lower) fair value for the respective underlying cash security. The impact of a change in
recovery rate on a credit derivative position will depend on whether credit protection has been bought or sold. The recovery
rate is ultimately driven by the value recoverable from collateral held after default occurs relative to the outstanding exposure
at that point.
Correlation
–
Correlation measures the interrelationship between the movements of two variables. It is expressed as a percentage between
–100% and +100%, where +100% represents perfectly correlated variables (meaning a movement of one variable is
associated with a movement of the other variable in the same direction), and –100% implies that the variables are inversely
correlated (meaning a movement of one variable is associated with a movement of the other variable in the opposite
direction). The effect of correlation on the measurement of fair value depends on the specific terms of the instruments being
valued, reflecting the range of different payoff features within such instruments.
Equity dividend
yields
–
The derivation of a forward price for an individual stock or index is important for measuring fair value for forward or swap
contracts and for measuring fair value using option pricing models. The relationship between the current stock price and the
forward price is based on a combination of expected future dividend levels and payment timings, and, to a lesser extent, the
relevant funding rates applicable to the stock in question. Dividend yields are generally expressed as an annualized percentage
of the share price, with the lowest limit of 0% representing a stock that is not expected to pay any dividend. The dividend
yield and timing represent the most significant parameter in determining fair value for instruments that are sensitive to an
equity forward price.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 211
Note 20 Fair value measurement (continued)
f) Level 3 instruments: sensitivity to changes in unobservable input assumptions
The table below summarizes those financial assets and liabilities classified as Level 3 for which a change in one or more
of the unobservable inputs to reflect reasonably possible favorable and unfavorable alternative assumptions would
change fair value significantly, and the estimated effect thereof. The table below does not represent the estimated effect
of stress scenarios. Interdependencies between Level 1, 2 and 3 parameters have not been incorporated in the table.
Furthermore, direct interrelationships between the Level 3 parameters discussed below are not a significant element of
the valuation uncertainty.
Sensitivity data is estimated using a number of techniques, including the estimation of price dispersion among different
market participants, variation in modeling approaches and reasonably possible changes to assumptions used within the
fair value measurement process. The sensitivity ranges are not always symmetrical around the fair values, as the inputs
used in valuations are not always precisely in the middle of the favorable and unfavorable range.
Sensitivity data is determined at a product or parameter level and then aggregated assuming no diversification benefit.
Diversification would incorporate estimated correlations across different sensitivity results and, as such, would result in
an overall sensitivity that would be less than the sum of the individual component sensitivities. However, UBS AG believes
that the diversification benefit is not significant to this analysis.
Sensitivity of fair value measurements to changes in unobservable input assumptions
1
31.12.25
31.12.24
USD m
Favorable
changes
Unfavorable
changes
Favorable
changes
Unfavorable
changes
Loans at fair value (held for trading and not held for trading) and guarantees
2
(67 )
(143 )
Securities financing transactions
(8 )
(24 )
Auction rate securities
(4 )
(6 )
Asset-backed securities
(15 )
(28 )
Equity instruments
(389 )
(308 )
Investment fund units
(206 )
(181 )
Loan commitments measured at FVTPL
(25 )
(42 )
Interest rate derivatives, net
(23 )
(70 )
Credit derivatives, net
(55 )
(117 )
Foreign exchange derivatives, net
(6 )
(2 )
Equity / index derivatives, net
(570 )
(617 )
Other
(83 )
(161 )
Total
(1,452 )
(1,700 )
1 Sensitivity of issued and over-the-counter debt instruments is reported with the equivalent derivative or Other. 2 Sensitivity of funded derivatives is reported under equivalent derivatives.
g) Level 3 instruments: movements during the period
The table below presents additional information about material Level 3 assets and liabilities measured at fair value on a
recurring basis. Level 3 assets and liabilities may be hedged with instruments classified as Level 1 or Level 2 in the fair
value hierarchy, and, as a result, realized and unrealized gains and losses included in the table may not include the effect
of related hedging activity. Furthermore, the realized and unrealized gains and losses presented in the table are not
limited solely to those arising from Level 3 inputs, as valuations are generally derived from both observable and
unobservable parameters. Assets and liabilities transferred into or out of Level 3 are presented as if those assets or
liabilities had been transferred at the beginning of the year.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 212
Note 20 Fair value measurement (continued)
Movements of Level 3 instruments
USD bn
Balance at
the
beginning
of the
period
Effect from
merger of
UBS AG
and Credit
Suisse AG
Net gains /
losses
included in
compre-
hensive
income
1
of which:
related to
instruments
held at the
end of the
period
Purchases
Sales
Issuances
Settlements
Transfers
into
Level 3
Transfers
out of
Level 3
Foreign
currency
translation
Balance
at the end
of the
period
For the twelve months ended 31 December 2025
2
Financial assets at fair value held for
trading
(0.2 )
(0.2 )
(1.6 )
(0.4 )
(0.1 )
of which: Equity instruments
(0.0 )
(0.0 )
(0.0 )
(0.0 )
(0.0 )
of which: Corporate and municipal
bonds
(0.1 )
(0.0 )
(0.5 )
(0.0 )
(0.1 )
of which: Loans
(0.1 )
(0.8 )
(0.4 )
(0.0 )
Derivative financial instruments –
assets
(0.3 )
(0.2 )
(0.0 )
(1.2 )
(0.3 )
(0.0 )
of which: Interest rate
(0.0 )
(0.3 )
(0.1 )
(0.1 )
of which: Equity / index
(0.3 )
(0.3 )
(0.0 )
(0.4 )
(0.2 )
of which: Credit
(0.1 )
(0.0 )
(0.0 )
(0.3 )
(0.0 )
Financial assets at fair value not held
for trading
(1.6 )
(1.8 )
(0.3 )
of which: Loans
(0.0 )
(1.5 )
(0.2 )
of which: Auction rate securities
(0.0 )
(0.0 )
(0.0 )
of which: Equity instruments
(0.0 )
(1.2 )
(0.0 )
(0.0 )
of which: Investment fund units
(0.2 )
(0.0 )
(0.0 )
of which: Asset-backed securities
(0.0 )
(0.0 )
(0.1 )
(0.1 )
(0.0 )
Derivative financial instruments –
liabilities
(0.0 )
(1.5 )
(0.6 )
of which: Interest rate
(0.1 )
(0.0 )
(0.2 )
(0.0 )
of which: Equity / index
(0.0 )
(1.0 )
(0.5 )
of which: Credit
(0.1 )
(0.0 )
(0.0 )
(0.2 )
(0.0 )
of which: Loan commitments
measured at FVTPL
(0.0 )
(0.0 )
(0.0 )
Debt issued designated at fair value
(0.0 )
(3.4 )
(3.7 )
Other financial liabilities designated
at fair value
(0.0 )
(2.0 )
(0.0 )
For the twelve months ended 31 December 2024
Financial assets at fair value held for
trading
(0.0 )
(0.3 )
(4.2 )
(3.1 )
(0.4 )
(0.1 )
of which: Equity instruments
(0.1 )
(0.1 )
(0.2 )
(0.0 )
(0.0 )
(0.0 )
of which: Corporate and municipal
bonds
(0.1 )
(0.1 )
(0.3 )
(0.0 )
(0.0 )
(0.0 )
of which: Loans
(0.1 )
(3.5 )
(3.0 )
(0.4 )
(0.1 )
Derivative financial instruments –
assets
(0.1 )
(0.7 )
(0.4 )
(0.0 )
of which: Interest rate
(0.1 )
(0.1 )
(0.0 )
of which: Equity / index
(0.0 )
(0.3 )
(0.3 )
(0.0 )
of which: Credit
(0.1 )
(0.0 )
(0.0 )
(0.1 )
(0.0 )
(0.0 )
Financial assets at fair value not held
for trading
(0.4 )
(1.9 )
(0.4 )
(0.1 )
of which: Loans
(0.4 )
(0.3 )
(0.1 )
of which: Auction rate securities
(0.0 )
(1.1 )
of which: Equity instruments
(0.0 )
(0.2 )
(0.0 )
(0.0 )
of which: Investment fund units
(0.0 )
(0.1 )
(0.0 )
(0.0 )
of which: Asset-backed securities
(0.1 )
(0.1 )
Derivative financial instruments –
liabilities
(0.0 )
(2.0 )
(0.6 )
(0.1 )
of which: Interest rate
(0.0 )
(0.0 )
(0.0 )
of which: Equity / index
(0.0 )
(1.8 )
(0.4 )
(0.1 )
of which: Credit
(0.1 )
(0.1 )
(0.0 )
(0.1 )
(0.0 )
(0.0 )
of which: Loan commitments
measured at FVTPL
(0.2 )
(0.0 )
(0.0 )
(0.1 )
(0.1 )
(0.0 )
Debt issued designated at fair value
(0.0 )
(3.5 )
(2.9 )
(0.3 )
Other financial liabilities designated at
fair value
(0.1 )
(0.1 )
(0.0 )
(1.1 )
(0.1 )
(0.0 )
1 Net gains / losses included in comprehensive income are recognized in Net interest income and Other net income from financial instruments measured at fair value through profit or loss in the Income statement,
and also in Gains / (losses) from own credit on financial liabilities designated at fair value, before tax in the Statement of comprehensive income. 2 Total Level 3 assets as of 31 December 2025 were USD
bn
(31 December 2024: USD
bn). Total Level 3 liabilities as of 31 December 2025 were USD
bn (31 December 2024: USD
bn).
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 213
Note 20 Fair value measurement (continued)
h) Maximum exposure to credit risk for financial instruments measured at fair value
The tables below provide UBS AG’s maximum exposure to credit risk for financial instruments measured at fair value and
the respective collateral and other credit enhancements mitigating credit risk for these classes of financial instruments.
The maximum exposure to credit risk includes the carrying amounts of financial instruments recognized on the balance
sheet subject to credit risk and the notional amounts for off-balance sheet arrangements. Where information is available,
collateral is presented at fair value. For other collateral, such as real estate, a reasonable alternative value is used. Credit
enhancements, such as credit derivative contracts and guarantees, are included at their notional amounts. Both are
capped at the maximum exposure to credit risk for which they serve as security. The “Risk management and control”
section of this report describes management’s view of credit risk and the related exposures, which can differ in certain
respects from the requirements of IFRS Accounting Standards.
Maximum exposure to credit risk
31.12.25
Maximum
exposure to
credit risk
Collateral
Credit enhancements
Exposure to
credit risk
after collateral
and credit
enhancements
USD bn
Cash
collateral
received
Collateralized
by equity and
debt
instruments
Secured by
real estate
Other
collateral
Netting
Credit
derivative
contracts
Guarantees
and sub-
participations
Financial assets measured at
fair value on the balance sheet
1
Financial assets at fair value
held for trading – debt instruments
2,3
Derivative financial instruments
4,5
Brokerage receivables
Financial assets at fair value not
held for trading – debt instruments
6
Total financial assets measured at fair value
Guarantees
31.12.24
Maximum
exposure to
credit risk
Collateral
Credit enhancements
Exposure to
credit risk
after collateral
and credit
enhancements
USD bn
Cash
collateral
received
Collateralized
by equity and
debt
instruments
Secured by
real estate
Other
collateral
Netting
Credit
derivative
contracts
Guarantees
and sub-
participations
Financial assets measured at
fair value on the balance sheet
1
Financial assets at fair value
held for trading – debt instruments
2,3
Derivative financial instruments
4,5
Brokerage receivables
Financial assets at fair value not
held for trading – debt instruments
6
Total financial assets measured at fair value
Guarantees
1 The maximum exposure to loss is generally equal to the carrying amount and subject to change over time with market movements. 2 For the purpose of this disclosure, collateral and credit enhancements were
not considered as these positions are generally managed under the market risk framework. 3 Does not include investment fund units. 4 Includes USD
m of fair value loan commitments (31 December 2024:
USD
m) and USD
m of forward starting reverse repurchase agreements classified as derivatives (31 December 2024: USD
m). The full contractual committed amount of forward starting reverse repurchase
agreements (generally highly collateralized) of USD
bn (31 December 2024: USD
bn) and derivative loan commitments (mostly secured) of USD
bn, of which USD
bn has been sub-participated
(31 December 2024: USD
bn, of which USD
bn had been sub-participated), is presented in Note 10 under notional amounts. 5 The amount shown in the “Netting” column represents the netting potential
not recognized on the balance sheet. Refer to Note 21 for more information. 6 Does not include unit-linked investment contracts and investment fund units. Financial assets at fair value not held for trading
collateralized by equity and debt instruments consisted of structured loans and reverse repurchase and securities borrowing agreements.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 214
Note 20 Fair value measurement (continued)
i) Financial instruments not measured at fair value
The table below provides the estimated fair values of financial instruments not measured at fair value.
Financial instruments not measured at fair value
31.12.25
31.12.24
Carrying
amount
Fair value
Carrying
amount
Fair value
USD bn
Total
Carrying
amount
approximates
fair value
1
Level 1
Level 2
Level 3
Total
Total
Carrying
amount
approximates
fair value
1
Level 1
Level 2
Level 3
Total
Assets
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing
transactions measured at amortized cost
Cash collateral receivables on derivative
instruments
Loans and advances to customers
Other financial assets measured at
amortized cost
Liabilities
Amounts due to banks
Payables from securities financing
transactions measured at amortized cost
Cash collateral payables on derivative
instruments
Customer deposits
Funding from UBS Group AG measured at
amortized cost
Debt issued measured at amortized cost
Other financial liabilities measured at
amortized cost
2
1 Includes certain financial instruments where the carrying amount is a reasonable approximation of the fair value due to the instruments’ short-term nature (instruments that are receivable or payable on demand or
with a remaining maturity (excluding the effects of callable features) of three months or less). 2 Excludes lease liabilities.
The fair values included in the table above have been calculated for disclosure purposes only. The valuation techniques
and assumptions described below relate only to the fair value of UBS AG’s financial instruments not measured at fair
value. Other institutions may use different methods and assumptions for their fair value estimations, and therefore such
fair value disclosures cannot necessarily be compared from one financial institution to another. The following principles
were applied when determining fair value estimates for financial instruments not measured at fair value.
–
For financial instruments with remaining maturities greater than three months, the fair value was determined from
quoted market prices, if available.
–
Where quoted market prices were not available, the fair values were estimated by discounting contractual cash flows
using current market interest rates or appropriate yield curves for instruments with similar credit risk and maturity.
These estimates generally include adjustments for counterparty credit risk or UBS AG’s own credit.
–
For short-term financial instruments with remaining maturities of three months or less, the carrying amount, which is
net of credit loss allowances, is generally considered a reasonable estimate of fair value.
Annual Report 2025
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Note 21 Offsetting financial assets and financial liabilities
UBS AG enters into netting agreements with counterparties to manage the credit risks associated primarily with
repurchase and reverse repurchase transactions, securities borrowing and lending, over-the-counter derivatives, and
exchange-traded derivatives. These netting agreements and similar arrangements generally enable the counterparties to
set liabilities off against available assets received in the ordinary course of business and / or in the event that the
counterparties to the transaction are unable to fulfill their contractual obligations.
The tables below provide a summary of financial assets and financial liabilities subject to offsetting, enforceable master
netting arrangements and similar agreements, as well as financial collateral received or pledged to mitigate credit
exposures for these financial instruments.
UBS AG engages in a variety of counterparty credit risk mitigation strategies in addition to netting and collateral
arrangements. Therefore, the net amounts presented in the tables below do not purport to represent their actual credit
risk exposure.
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
Assets subject to netting arrangements
Netting recognized on the balance sheet
Netting potential not recognized on
the balance sheet
1
Assets not
subject to netting
arrangements
2
Total assets
As of 31.12.25, USD bn
Gross assets
before netting
Netting with
gross liabilities
3
Net assets
recognized
on the
balance
sheet
Financial
liabilities
Collateral
received
Assets after
consideration
of
netting
potential
Assets
recognized
on the
balance
sheet
Total assets
after
consideration
of netting
potential
Total assets
recognized
on the
balance
sheet
Receivables from securities financing
transactions measured at amortized cost
(21.9 )
(2.0 )
(67.1 )
Derivative financial instruments
(3.4 )
(110.3 )
(22.4 )
Cash collateral receivables on
derivative instruments
4
(24.1 )
(1.7 )
Financial assets at fair value
not held for trading
(88.3 )
(1.3 )
(24.8 )
of which: reverse
repurchase agreements
(88.3 )
(1.3 )
(19.3 )
Total assets
(113.6 )
(137.7 )
(116.0 )
As of 31.12.24, USD bn
Receivables from securities financing
transactions measured at amortized cost
(13.3 )
(3.1 )
(95.0 )
Derivative financial instruments
(2.6 )
(135.6 )
(27.1 )
Cash collateral receivables on
derivative instruments
4
(25.9 )
(2.4 )
Financial assets at fair value
not held for trading
(87.1 )
(1.8 )
(23.3 )
of which: reverse
repurchase agreements
(87.1 )
(1.8 )
(20.6 )
Total assets
(103.0 )
(166.4 )
(147.7 )
1 For the purpose of this disclosure, the amounts of financial instruments and cash collateral presented have been capped so as not to exceed the net amount of financial assets presented on the balance sheet; i.e.
over-collateralization, where it exists, is not reflected in the table. 2 Includes assets not subject to enforceable netting arrangements and other out-of-scope items. 3 The logic of the table results in amounts
presented in the “Netting with gross liabilities” column corresponding directly to the amounts presented in the “Netting with gross assets” column in the liabilities table presented below. Netting in this column for
reverse repurchase agreements presented within the lines “Receivables from securities financing transactions measured at amortized cost” and “Financial assets at fair value not held for trading” taken together
corresponds to the amounts presented for repurchase agreements in the “Payables from securities financing transactions measured at amortized cost” and “Other financial liabilities designated at fair value” lines in
the liabilities table presented below. 4 The net amount of Cash collateral receivables on derivative instruments recognized on the balance sheet includes certain OTC derivatives that are legally net settled on a daily
basis and exchange-traded derivatives that are economically settled on a daily basis.
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Note 21 Offsetting financial assets and financial liabilities (continued)
Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
Liabilities subject to netting arrangements
Netting recognized on the balance sheet
Netting potential not recognized
on the balance sheet
1
Liabilities not
subject
to netting
arrangements
2
Total liabilities
As of 31.12.25, USD bn
Gross
liabilities
before
netting
Netting with
gross assets
3
Net
liabilities
recognized
on the
balance
sheet
Financial
assets
Collateral
pledged
Liabilities
after
consideration
of netting
potential
Liabilities
recognized
on the
balance
sheet
Total
liabilities
after
consideration
of netting
potential
Total
liabilities
recognized
on the
balance
sheet
Payables from securities financing
transactions measured at amortized cost
(21.1 )
(2.0 )
(13.2 )
4
Derivative financial instruments
(3.4 )
(110.3 )
(29.0 )
Cash collateral payables on
derivative instruments
5
(15.8 )
(1.7 )
Other financial liabilities
designated at fair value
(89.1 )
(1.3 )
(3.8 )
of which: repurchase agreements
(89.1 )
(1.3 )
(2.3 )
Total liabilities
(113.6 )
(129.4 )
(47.8 )
As of 31.12.24, USD bn
Payables from securities financing
transactions measured at amortized cost
(11.5 )
(1.1 )
(12.4 )
4
Derivative financial instruments
(2.6 )
(135.6 )
(30.8 )
Cash collateral payables on
derivative instruments
5
(20.2 )
(2.4 )
Other financial liabilities
designated at fair value
(88.9 )
(3.8 )
(4.1 )
of which: repurchase agreements
(88.9 )
(3.8 )
(2.0 )
Total liabilities
(103.0 )
(160.7 )
(49.7 )
1 For the purpose of this disclosure, the amounts of financial instruments and cash collateral presented have been capped so as not to exceed the net amount of financial liabilities presented on the balance sheet; i.e.
over-collateralization, where it exists, is not reflected in the table. 2 Includes liabilities not subject to enforceable netting arrangements and other out-of-scope items. 3 The logic of the table results in amounts
presented in the “Netting with gross assets” column corresponding directly to the amounts presented in the “Netting with gross liabilities” column in the assets table presented above. Netting in this column for
repurchase agreements presented within the lines “Payables from securities financing transactions measured at amortized cost” and “Other financial liabilities designated at fair value” taken together corresponds to
the amounts presented for reverse repurchase agreements in the “Receivables from securities financing transactions measured at amortized cost” and “Financial assets at fair value not held for trading” lines in the
assets table presented above. 4 Includes collateral of USD
bn (2024: USD
bn) for securities financing transactions measured at amortized cost that use UBS AG debt instruments as the underlying. 5 The net
amount of Cash collateral payables on derivative instruments recognized on the balance sheet includes certain OTC derivatives that are legally net settled on a daily basis and exchange-traded derivatives that are
economically settled on a daily basis.
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Note 22 Restricted and transferred financial assets
This Note provides information about restricted financial assets (Note 22a), transfers of financial assets (Note 22b and
22c) and financial assets that are received as collateral with the right to resell or repledge these assets (Note 22d).
a) Restricted financial assets
Restricted financial assets consist of assets pledged as collateral against an existing liability or contingent liability and
other assets that are otherwise explicitly restricted such that they cannot be used to secure funding.
Financial assets pledged as collateral include pledged mortgage loans, which serve as collateral for existing liabilities
against Swiss mortgage institutions and US Federal Home Loan Banks, and in connection with the issuance of covered
bonds. Existing liabilities against Swiss central mortgage institutions and US Federal Home Loan Banks and for existing
covered bond issuances were USD
bn as of 31 December 2025 (31 December 2024: USD
bn).
Other financial assets are pledged as collateral in relation to securities lending transactions and in repurchase transactions,
which are generally entered into under standard market agreements. For securities lending, the cash received as collateral
may be more or less than the fair value of the securities loaned, depending on the nature of the transaction. For
repurchase agreements, the fair value of the collateral sold under an agreement to repurchase is generally in excess of
the cash borrowed.
Other restricted financial assets include assets protected under client asset segregation rules, assets held under unit-linked
investment contracts to back related liabilities to the policy holders and assets held in certain jurisdictions to comply with
explicit minimum local asset maintenance requirements. The carrying amount of the liabilities associated with these other
restricted financial assets is generally equal to the carrying amount of the assets, with the exception of assets held to
comply with local asset maintenance requirements, for which the associated liabilities are greater.
Restricted financial assets
USD m
31.12.25
31.12.24
Restricted
financial assets
of which: assets
pledged as
collateral that
may be sold or
repledged by
counterparties
Restricted
financial assets
of which: assets
pledged as
collateral that
may be sold or
repledged by
counterparties
Financial assets pledged as collateral
Cash and balances at central banks
1
Financial assets at fair value held for trading
Loans and advances to customers
Financial assets at fair value not held for trading
Other financial assets measured at amortized cost
Financial assets measured at fair value through other comprehensive income
Total financial assets pledged as collateral
Other restricted financial assets
Amounts due from banks
Financial assets at fair value held for trading
Cash collateral receivables on derivative instruments
Loans and advances to customers
Other financial assets measured at amortized cost
2
Financial assets at fair value not held for trading
Financial assets measured at fair value through other comprehensive income
Other
Total other restricted financial assets
Total financial assets pledged and other restricted financial assets
3
1 Predominantly reflects assets pledged to the depositor protection system in Switzerland. 2 Predominantly includes cash collateral provided to exchanges and clearing houses to secure securities trading activity
through those counterparties. 3 Does not include assets placed with central banks related to undrawn credit lines and for payment, clearing and settlement purposes, as well as undrawn contingency funding
facilities (31 December 2025: USD
bn; 31 December 2024: USD
bn).
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Note 22 Restricted and transferred financial assets (continued)
In addition to restrictions on financial assets, UBS AG and its subsidiaries are, in certain cases, subject to regulatory
requirements that affect the transfer of dividends and capital within UBS AG, as well as intercompany lending. Supervisory
authorities may also require entities to measure capital and leverage ratios on a stressed basis, such as the Federal Reserve
Board’s Comprehensive Capital Analysis and Review (CCAR) process, which may limit the relevant subsidiaries’ ability to
make distributions of capital based on the results of those tests.
Supervisory authorities generally have discretion to impose higher requirements or to otherwise limit the activities of
subsidiaries.
Non-regulated subsidiaries are generally not subject to such requirements and transfer restrictions. However, restrictions
can also be the result of different legal, regulatory, contractual, entity- or country-specific arrangements and / or
requirements.
b) Transferred financial assets that are not derecognized in their entirety
The table below presents information for financial assets that have been transferred but are subject to continued
recognition in full, as well as recognized liabilities associated with those transferred assets.
Transferred financial assets subject to continued recognition in full
USD m
31.12.25
31.12.24
Carrying amount
of transferred
assets
Carrying amount of
associated liabilities
recognized
on balance sheet
Carrying amount
of transferred
assets
Carrying amount of
associated liabilities
recognized
on balance sheet
Financial assets at fair value held for trading that may be sold or repledged by counterparties
Financial assets at fair value not held for trading that may be sold or repledged by
counterparties
Other financial assets measured at amortized cost that may be sold or repledged by
counterparties
Financial assets measured at fair value through other comprehensive income that may be sold
or repledged by counterparties
Total financial assets transferred
Transactions in which financial assets are transferred but continue to be recognized in their entirety on UBS AG’s balance
sheet include securities lending and repurchase agreements, as well as other financial asset transfers. Repurchase and
securities lending arrangements are, for the most part, conducted under standard market agreements and are undertaken
with counterparties subject to UBS AG’s normal credit risk control processes.
›
Refer to Note 1a item 2e for more information about repurchase and securities lending agreements
Financial assets at fair value held for trading that may be sold or repledged by counterparties include securities lending
and repurchase agreements in exchange for cash received, securities lending agreements in exchange for securities
received and other financial asset transfers.
For securities lending and repurchase agreements, a haircut of between
% and
% is generally applied to the
transferred assets, which results in associated liabilities having a carrying amount below the carrying amount of the
transferred assets. The counterparties to the associated liabilities included in the table above have full recourse to UBS AG.
In securities lending arrangements entered into in exchange for the receipt of other securities as collateral, neither the
securities received nor the obligation to return them are recognized on UBS AG’s balance sheet, as the risks and rewards
of ownership are not transferred to UBS AG. In cases where such financial assets received are subsequently sold or
repledged in another transaction, this is not considered to be a transfer of financial assets.
Other financial asset transfers primarily include securities transferred to collateralize derivative transactions, for which the
carrying amount of associated liabilities is not included in the table above, because those replacement values are managed
on a portfolio basis across counterparties and product types, and therefore there is no direct relationship between the
specific collateral pledged and the associated liability.
Transferred financial assets that are not subject to derecognition in full but remain on the balance sheet to the extent of
UBS AG’s continuing involvement were not material as of 31 December 2025 and as of 31 December 2024.
Annual Report 2025
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Note 22 Restricted and transferred financial assets (continued)
c) Transferred financial assets that are derecognized in their entirety with continuing involvement
Continuing involvement in a transferred and fully derecognized financial asset may result from contractual provisions in
the particular transfer agreement or from a separate agreement, with the counterparty or a third party, entered into in
connection with the transfer.
The fair value and carrying amount of UBS AG’s continuing involvement from transferred positions as of 31 December
2025 and 31 December 2024 was not material. Life-to-date losses reported in prior periods primarily related to legacy
positions in securitization vehicles that have been fully marked down, with no remaining exposure to loss.
d) Off-balance sheet assets received
The table below presents assets received from third parties that can be sold or repledged and that are not recognized on
the balance sheet but that are held as collateral, including amounts that have been sold or repledged.
Off-balance sheet assets received
USD m
31.12.25
31.12.24
Fair value of assets received that can be sold or repledged
1
of which: sold or repledged
1 Includes securities received as initial margin from its clients that UBS AG is required to remit to central counterparties, brokers and deposit banks through its exchange-traded derivative clearing and execution
services. 2 Does not include off-balance sheet securities (31 December 2025: USD
bn; 31 December 2024: USD
bn) placed with central banks related to undrawn credit lines and for payment, clearing and
settlement purposes for which there are no associated liabilities or contingent liabilities.
Note 23 Maturity analysis of assets and liabilities
a) Maturity analysis of carrying amounts of assets and liabilities
The table below provides an analysis of carrying amounts of balance sheet assets and liabilities, as well as off-balance
sheet exposures by residual contractual maturity as of the reporting date. The residual contractual maturity of assets
includes the effects of callable features. The residual contractual maturity of liabilities and off-balance sheet exposures is
based on the earliest date on which a third party could require UBS AG to pay.
Derivative financial instruments and financial assets and liabilities at fair value held for trading are presented in the
Due
within 1 month
one month.
Assets held to hedge unit-linked investment contracts (presented within
Financial assets at fair value not held for trading
)
are presented in the
Due within 1 month
under unit-linked investment contracts (presented within
Other financial liabilities designated at fair value
).
Other financial assets and liabilities with no contractual maturity, such as equity securities, are presented in the
Perpetual /
Not applicable
counterparty of the instrument is entitled to give. Where there is no contractual notice period, undated or perpetual
contracts are presented in the
Perpetual / Not applicable
Non-financial assets and liabilities with no contractual maturity are generally included in the
Perpetual / Not applicable
column.
Annual Report 2025
| Consolidated financial statements | UBS AG consolidated financial statements 220
Note 23 Maturity analysis of assets and liabilities (continued)
Maturity analysis of carrying amounts of assets and liabilities
31.12.25
USD bn
Due within
1 month
Due between
1 and 3
months
Due between
3 and 12
months
Due between
1 and 2 years
Due between
2 and 5 years
Due over
5 years
Perpetual /
Not
applicable
Total
Assets
Total financial assets measured at amortized cost
Amounts due from banks
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at fair value through profit or
loss
Financial assets at fair value not held for trading
Financial assets measured at fair value through other
comprehensive income
Total non-financial assets
Total assets
Liabilities
Total financial liabilities measured at amortized cost
Customer deposits
Funding from UBS Group AG measured at amortized cost
Debt issued measured at amortized cost
of which: non-subordinated
of which: subordinated
Total financial liabilities measured at fair value through
profit or loss
1
Debt issued designated at fair value
Total non-financial liabilities
Total liabilities
Guarantees, loan commitments and forward starting transactions
2
Irrevocable loan commitments
Guarantees
Forward starting reverse repurchase and securities borrowing
agreements
Irrevocable committed prolongation of existing loans
Total
31.12.24
USD bn
Due within
1 month
Due between
1 and 3
months
Due between
3 and 12
months
Due between
1 and 2 years
Due between
2 and 5 years
Due over
5 years
Perpetual /
Not
applicable
Total
Assets
Total financial assets measured at amortized cost
Amounts due from banks
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at fair value through profit or
loss
Financial assets at fair value not held for trading
Financial assets measured at fair value through other
comprehensive income
Total non-financial assets
Total assets
Liabilities
Total financial liabilities measured at amortized cost
Customer deposits
Funding from UBS Group AG measured at amortized cost
Debt issued measured at amortized cost
of which: non-subordinated
of which: subordinated
Total financial liabilities measured at fair value through
profit or loss
1
Debt issued designated at fair value
Total non-financial liabilities
Total liabilities
Guarantees, loan commitments and forward starting transactions
2
Irrevocable loan commitments
Guarantees
Forward starting reverse repurchase and securities borrowing
agreements
Irrevocable committed prolongation of existing loans
Total
1 As of 31 December 2025 and 31 December 2024, the contractual redemption amount at maturity of debt issued designated at fair value through profit or loss and other financial liabilities designated at fair value
through profit or loss was not materially different from the carrying amount. 2 The notional amounts associated with derivative loan commitments and forward starting repurchase and reverse repurchase agreements
measured at fair value through profit or loss are presented together with the total notional amounts related to derivative instruments in Note 10 and have been excluded from the table above.
Annual Report 2025
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Note 23 Maturity analysis of assets and liabilities (continued)
b) Maturity analysis of financial liabilities on an undiscounted basis
The table below provides an analysis of financial liabilities on an undiscounted basis, including all cash flows relating to
principal and future interest payments. The residual contractual maturities for non-derivative and non-trading financial
liabilities are based on the earliest date on which UBS AG could be contractually required to pay. Derivative positions and
trading liabilities, predominantly made up of short sale transactions, are presented in the
Due within 1 month
,
as this provides a conservative reflection of the nature of these trading activities. The residual contractual maturities may
extend over periods significantly longer than one month.
Maturity analysis of financial liabilities on an undiscounted basis
31.12.25
USD bn
Due within
1 month
Due between
1 and 3
months
Due between
3 and 12
months
Due between
1 and 2 years
Due between
2 and 5 years
Due over
5 years
Perpetual /
Not
applicable
Total
Financial liabilities recognized on balance sheet
1
Amounts due to banks
Payables from securities financing transactions
Cash collateral payables on derivative instruments
Customer deposits
Funding from UBS Group AG measured at amortized cost
2
Debt issued measured at amortized cost
2
Other financial liabilities measured at amortized cost
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
3,4
Derivative financial instruments
3,5
Brokerage payables designated at fair value
Debt issued designated at fair value
6
Other financial liabilities designated at fair value
Total financial liabilities measured at fair value through
profit or loss
Total
Guarantees, loan commitments and forward starting transactions
Irrevocable loan commitments
7
Guarantees
Forward starting reverse repurchase and securities
borrowing agreements
7
Irrevocable committed prolongation of existing loans
Total
31.12.24
USD bn
Due within
1 month
Due between
1 and 3
months
Due between
3 and 12
months
Due between
1 and 2 years
Due between
2 and 5 years
Due over
5 years
Perpetual /
Not
applicable
Total
Financial liabilities recognized on balance sheet
1
Amounts due to banks
Payables from securities financing transactions
Cash collateral payables on derivative instruments
Customer deposits
Funding from UBS Group AG measured at amortized cost
2
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
3,4
Derivative financial instruments
3,5
Brokerage payables designated at fair value
Debt issued designated at fair value
6
Other financial liabilities designated at fair value
Total financial liabilities measured at fair value through
profit or loss
Total
Guarantees, loan commitments and forward starting transactions
Irrevocable loan commitments
7
Guarantees
Forward starting reverse repurchase and securities
borrowing agreements
7
Irrevocable committed prolongation of existing loans
Total
1 Except for financial liabilities at fair value held for trading and derivative financial instruments (see footnote 3), the amounts presented generally represent undiscounted cash flows of future interest and principal
payments. 2 The time-bucket Perpe tual / Not applicable includes perpetual loss-absorbing additional tier 1 capital instruments, for which future interest payments are calculated over a 5 year period. 3 Carrying
amount is fair value. Management believes that this best represents the cash flows that would have to be paid if these positions had to be settled or closed out. 4 Contractual maturities of financial liabilities at fair
value held for trading are: USD
bn due within 1 month (31 December 2024: USD
bn), USD
bn due between 1 month and 1 year (31 December 2024: USD
bn). 5 Includes USD
m (31 December 2024:
USD
m) related to fair values of derivative loan commitments and forward starting reverse repurchase agreements classified as derivatives, presented within “Due within 1 month”. The full contractual committed
amount of USD
bn (31 December 2024: USD
bn) is presented in Note 10 under notional amounts. 6 Future interest payments on variable-rate liabilities are determined by reference to the applicable interest
rate prevailing as of the reporting date. Future principal payments that are variable are determined by reference to the conditions existing at the relevant reporting date. 7 Excludes derivative loan commitments and
forward starting reverse repurchase agreements measured at fair value (see footnote 5).
Annual Report 2025
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Note 24 Hedge accounting
Derivatives designated in hedge accounting relationships
UBS AG applies hedge accounting to interest rate risk and foreign exchange risk, including structural foreign exchange
risk related to net investments in foreign operations.
›
Refer to “Market risk” in the “Risk management and control” section of this report for more information about how risks arise
and how they are managed by UBS AG
Hedging instruments and hedged risk
Interest rate swaps are designated in fair value hedges or cash flow hedges of interest rate risk arising solely from changes
in benchmark interest rates. Fair value changes arising from such risk are usually the largest component of the overall
change in the fair value of the hedged position in the transaction currency.
Cross-currency swaps are designated as fair value hedges of foreign exchange risk. Foreign exchange forwards and
foreign exchange swaps are mainly designated as hedges of structural foreign exchange risk related to net investments
in foreign operations. In both cases the hedged risk arises solely from changes in the spot foreign exchange rate.
The notional of the designated hedging instruments matches the notional of the hedged items, except when the interest
rate swaps are designated in cash flow hedges after the trade date, in which case the hedge ratio designated is
determined based on the swap sensitivity.
Hedged items and hedge designation
Fair value hedges of interest rate risk related to debt instruments and loan assets
Fair value hedges of interest rate risk related to debt instruments and loan assets involve swapping fixed cash flows
associated with loans to customers (including long-term fixed-rate mortgage loans in Swiss francs), debt securities held,
customer deposits, funding from UBS Group AG, debt issued to floating cash flows by entering into interest rate swaps
that either pay fixed and receive floating cash flows or that receive fixed and pay floating cash flows. The floating future
cash flows are based on the following benchmark rates: the Secured Overnight Financing Rate (SOFR), the Effective
Federal Funds Rate (EFFR), the Swiss Average Rate Overnight (SARON), the Euro Short-Term Rate (ESTR), the Euro
Interbank Offered Rate (EURIBOR), the Sterling Overnight Index Average (SONIA), the Singapore Overnight Rate Average
(SORA), the Bank Bill Swap Rate (BBSW), the Tokyo Overnight Average Rate (TONA), the Hong Kong Interbank Offered
Rate (HIBOR) and the Norwegian Krona Overnight Index Swap (NOK OIS).
Cash flow hedges of forecast transactions
UBS AG hedges forecast cash flows on non-trading financial assets and liabilities that bear interest at variable rates or
are expected to be refinanced or reinvested in the future, due to movements in future market rates. The amounts and
timing of future cash flows, representing both principal and interest flows, are projected on the basis of contractual terms
and other relevant factors, including estimates of prepayments and defaults. The aggregate principal balances and
interest cash flows across all portfolios over time form the basis for identifying the non-trading interest rate risk of
UBS AG, which is hedged with interest rate swaps, the maximum maturity of which is 15 years. Cash flow forecasts and
risk exposures are monitored and adjusted on an ongoing basis, and consequently additional hedging instruments are
traded and designated, or are terminated resulting in a hedge discontinuance.
Fair value hedges of foreign exchange risk related to debt instruments
Debt instruments denominated in currencies other than the US dollar are designated in fair value hedges of spot foreign
exchange risk, in addition to and separate from the fair value hedges of interest rate risk. Cross-currency swaps
economically convert debt instruments denominated in currencies other than the US dollar to US dollars. The hedge
designations also involve intragroup debt instruments that are eliminated upon consolidation but FX gains and losses
impact consolidated profit or loss.
Hedges of net investments in foreign operations
UBS AG applies hedge accounting for certain net investments in foreign operations, which include subsidiaries, branches
and associates. Upon maturity of hedging instruments, typically one to three months with certain hedges extending up
to twelve months, the hedge relationship is terminated and new designations are made to reflect any changes in the net
investments in foreign operations.
Economic relationship between hedged item and hedging instrument
The economic relationship between the hedged item and the hedging instrument is determined based on a qualitative
analysis of their critical terms. In cases where hedge designation takes place after the trade date of the hedging
instrument, a quantitative analysis of the possible behavior of the hedging derivative and the hedged item during their
respective terms is also performed.
Sources of hedge ineffectiveness
In hedges of interest rate risk, hedge ineffectiveness can arise from mismatches of critical terms and / or the use of
different curves to discount the hedged item and instrument, or from entering into a hedge relationship after the trade
date of the hedging derivative.
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Note 24 Hedge accounting (continued)
In hedges of foreign exchange risk related to debt instruments, hedge ineffectiveness can arise due to the discounting of
the hedging instruments and undesignated risk components and lack of such discounting and risk components in the
hedged items.
In hedges of net investments in foreign operations, ineffectiveness is unlikely unless the hedged net assets fall below the
designated hedged amount. The exceptions are hedges where the hedging currency is not the same as the currency of
the foreign operation, where the currency basis may cause ineffectiveness.
Hedge ineffectiveness is recognized in
Other net income from financial instruments measured at fair value through profit
or loss.
Derivatives not designated in hedge accounting relationships
Non-hedge-accounted derivatives are mandatorily held for trading with all fair value movements taken to
Other net
income from financial instruments measured at fair value through profit or loss
, even when held as an economic hedge
or to facilitate client clearing. The one exception relates to forward points on certain short- and long-duration foreign
exchange and interest rate contracts acting as economic hedges, which are reported in
Net interest income.
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Filing: 20-F - UBS AG (AMUB,BDCX,BDCZ,CEFD,HDLB,IFED,IWDL,IWFL,IWML,MLPB,MLPR,MTUL,MVRL,PFFL,QULL,SCDL,SMHB,UCIB,USML)
Accession Number: 0001610520-26-000026