UBS Group AG Q1 FY2025 earnings call

• Sergio mentioned first quarter net profit $1.7 billion, underlying return on CET1 capital 11.3%. Strong net new inflows, $32 billion in Global Wealth Management and $7 billion in asset management. Progress in integrating Credit Suisse, migrated over 1 million clients in Switzerland, continued to integrate 95 petabytes of data.
• Todd talked about core businesses' combined pretax profitability grew 15% on strong operating leverage. Group profit before tax $2.6 billion, down 1% year-on-year. Group revenues $12 billion, up 6% across core franchises. Cost update: $900 million additional gross run rate cost saves, cumulative $8.4 billion since end 2022. Balance sheet details: $1.5 trillion total assets, $615 billion loan balances, $745 billion deposits, LCR 181%. CET1 capital ratio 14.3%.

Global Wealth Management

• Pretax profit was $1.5 billion, up 21% year-over-year. Revenue growth outpaced expenses by 5 percentage points, translating to a year-over-year improvement in cost income ratio of over 3 percentage points to 75%. Net new assets in the quarter reached $32 billion. Net interest income down 4% year-over-year and 7% quarter-over-quarter.

Asset Management

• Drove a pretax profit of $208 million, up 15% year-on-year, with disciplined cost management compensating for lower revenues. Net new money was positive $7 billion.

Investment Bank

• Delivered pretax profit of $696 million, up 72%, revenues increased by 24% to $3 billion.

Non-core and legacy

• Pretax loss was $200 million with $284 million in revenues. Expect to generate an underlying pretax loss excluding litigation of around $1.7 billion for the remainder of the year.

• Intend to execute on all 2025 capital return ambitions. GWM's net interest income expected to decrease by low single-digit percentage in full year 2025 compared to 2024. Non-core and legacy expected to generate underlying pretax loss excluding litigation of around $1.7 billion for remainder of year.

• Prospect of higher tariffs on global trade presents material risk to global growth and inflation. Uncertainty likely to affect sentiment and lead businesses and investors to delay decisions. Financial markets sensitive to new developments, likely to cause further volatility.

Q: Jeremy Sigee asked about accruing the whole of the 2025 share buyback and wealth management clients' reaction in April post tariffs.

A: Sergio said it's based on current strong performance and capital position, subject to regulatory regime. In April, saw huge client activity and volatility initially, then market stabilizing with wait-and-see attitude.

Q: Giulia Miotto asked about re-leveraging in Asia and capital proposal.

A: Todd said pleased with 1Q lending performance, strategic focus remains. Sergio said no developments on capital proposal yet, proposal expected in first week of June.

Q: Kian Abouhossein asked about U.S. Wealth Management advisers and Federal Council report.

A: Todd said platform stable, strong same-store net new money. Sergio said can't comment much on positioning vs other banks, wait for proposal content.

Q: Stefan Stalmann asked about parent bank CET1 ratio and risk density.

A: Todd said reduction due to dividend accrual, leverage more constrained but CET1 ratio key target.

Q: Benjamin Goy asked about India partnership and Swiss negative rates impact.

A: Sergio talked about India partnership with fully independent asset gatherer. Todd said convexity in rates for P&C, deposit outlook stable.

Q: Amit Goel asked about equity double leverage and PCB volumes.

A: Todd said lower leverage ratio is more prudent. P&C lending volumes flattish, deposit outlook stable.

Q: Andrew Coombs asked about capital buyback rationale and GWM NII.

A: Sergio said main driver is managing ratio, accrue to be closer to 14%. Andrew on GWM NII, Sergio explained resegmentation impact and full year guidance unchanged.

Q: Chris Hallam asked about LCM pool and regulatory regime risk.

A: Sergio said sponsors on wait-and-see, pipeline healthy. Regulatory regime risk is a possibility, not reflecting expectation.

Q: Piers Brown asked about FRC and capital repatriation.

A: Todd said FRC pickup due to FX strength. Capital repatriation from foreign subs ongoing, working with regulators.