ubsgroupag6k1q22

Corporate calendar UBS Group AG Publication of the second quarter 2022 report: Tuesday, 26 July 2022 Publication of the third quarter 2022 report: Tuesday, 25 October 2022 Publication of the fourth quarter 2022 report: Tuesday, 31 January 2023 Corporate calendar UBS AG Publication of the first quarter 2022 report: Friday, 29 April 2022 Publication dates of future quarterly and annual reports and results are made available as part of the corporate calendar of UBS AG at ubs.com/investors.
		1.	UBS Group
		4	Recent developments
		6	Group performance

		2.	UBS business divisions and Group Functions
		14	Global Wealth Management
		17	Personal & Corporate Banking
		19	Asset Management
		21	Investment Bank
		23	Group Functions
		24	Selected financial information of our business divisions and Group Functions

		3.	Risk, capital, liquidity and funding, and balance sheet
		27	Risk management and control
		32	Capital management
		43	Liquidity and funding management
		44	Balance sheet and off-balance sheet
		47	Share information and earnings per share

		4.	Consolidated financial statements
		51	UBS Group AG interim consolidated financial statements (unaudited)
		86	UBS AG interim consolidated financial information (unaudited)

		5.	Significant regulated subsidiary and sub-group information
		90	Financial and regulatory key figures for our significant regulated subsidiaries and sub-groups

			Appendix

		94	Alternative performance measures
		97	Abbreviations frequently used in our financial reports
		99	Information sources
		100	Cautionary statement

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 +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 +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 505000 Louisville, KY 40233-5000, USA Shareholder online inquiries: www-us.computershare.com/ investor/contact 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

First quarter 2022 report

Our key figures

	As of or for the quarter ended
USD million, except where indicated	31.3.22	31.12.21	31.3.21
Group results
Operating income	9,363	8,732	8,705
Operating expenses	6,634	7,003	6,407
Operating profit / (loss) before tax	2,729	1,729	2,298
Net profit / (loss) attributable to shareholders	2,136	1,348	1,824
Diluted earnings per share (USD)¹	0.61	0.38	0.49
Profitability and growth²
Return on equity (%)	14.3	8.9	12.4
Return on tangible equity (%)	16.0	10.0	14.0
Return on common equity tier 1 capital (%)	19.0	11.9	18.2
Return on risk-weighted assets, gross (%)	12.2	11.5	12.0
Return on leverage ratio denominator, gross (%)	3.5	3.3	3.3
Cost / income ratio (%)	70.7	80.5	73.8
Effective tax rate (%)	21.4	21.4	20.5
Net profit growth (%)	17.1	(17.6)	14.3
Resources²
Total assets	1,139,922	1,117,182	1,107,712
Equity attributable to shareholders	58,855	60,662	58,026
Common equity tier 1 capital³	44,593	45,281	40,426
Risk-weighted assets³	312,037	302,209	287,828
Common equity tier 1 capital ratio (%)³	14.3	15.0	14.0
Going concern capital ratio (%)³	19.2	20.0	19.6
Total loss-absorbing capacity ratio (%)³	34.2	34.7	35.0
Leverage ratio denominator³	1,072,953	1,068,862	1,038,225
Common equity tier 1 leverage ratio (%)³	4.16	4.24	3.89
Going concern leverage ratio (%)³	5.6	5.7	5.4
Total loss-absorbing capacity leverage ratio (%)³	9.9	9.8	9.7
Liquidity coverage ratio (%)⁴	160	155	151
Net stable funding ratio (%)⁴	122	119	114
Other
Invested assets (USD billion)⁵	4,380	4,596	4,306
Personnel (full-time equivalents)	71,697	71,385	71,779
Market capitalization¹	65,775	61,230	54,536
Total book value per share (USD)¹	17.57	17.84	16.47
Total book value per share (CHF)¹	16.24	16.27	15.57
Tangible book value per share (USD)¹	15.67	15.97	14.65
Tangible book value per share (CHF)¹	14.48	14.56	13.85
1 Refer to the “Share information and earnings per share” section of this report for more information. 2 Refer to the “Targets, aspirations and capital guidance” section of our Annual Report 2021 for more information about our performance targets. 3 Based on the Swiss systemically relevant bank framework as of 1 January 2020. Refer to the “Capital management” section of this report for more information. 4 The final Swiss net stable funding ratio (NSFR) regulation became effective on 1 July 2021. Prior to this date, the NSFR was based on estimated pro forma reporting. 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 and Personal & Corporate Banking. Refer to “Note 32 Invested assets and net new money” in the “Consolidated financial statements” section of our Annual Report 2021 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 the Group, our business divisions and our Group Functions. 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. Our APMs may qualify as non-GAAP measures as defined by US Securities and Exchange Commission (SEC) regulations.

Recent developments

Russia’s invasion of Ukraine

The war in Ukraine has led to one of the largest humanitarian crises in decades, severe sanctions imposed by various governments on Russia and certain Russian entities and nationals, a mass exodus of businesses from Russia, and heightened volatility across global markets. The long-term consequences are still difficult to assess, but there will likely be global ramifications that are felt for some time.

As a result of Russia’s invasion of Ukraine, several jurisdictions, including the US, the EU, the UK, Switzerland and others, have imposed extensive sanctions on Russia and Belarus and certain Russian and Belarusian entities and nationals. Among others, the financial sanctions include asset freezes for sanctioned individuals and corporations, and limits on financial transactions with sanctioned entities and individuals. We continue to implement the rapidly evolving and complex sanctions imposed by numerous countries.

We are not conducting any new business in Russia or with Russia-domiciled clients.

We have reduced our exposure to Russia following the invasion of Ukraine in February 2022. Our direct country risk exposure to Russia decreased to USD 0.4 billion as of 31 March 2022 compared with USD 0.6 billion as of 31 December 2021. This includes trade finance exposures in Personal & Corporate Banking, a single loan in the Investment Bank, nostro and cash account balances, issuer risk on trading inventory within the Investment Bank, and derivatives within the Investment Bank. We had no material direct country risk exposures to Ukraine or to Belarus as of 31 March 2022.

Reliance on Russian, Ukrainian or Belarusian assets as collateral for secured financing is negligible.

Countries have imposed, and continue to impose, novel forms of sanctions. For example, the EU and Switzerland have prohibited acceptance of deposits in excess of EUR 100,000 from Russian persons not entitled to residency in the European Economic Area (EEA) or Switzerland. Around 0.7% of our invested assets in Global Wealth Management as of 31 March 2022 related to these clients.

We are monitoring potential second-order impacts on our clients and other counterparties, including those that may result from a prolongation or escalation of hostilities. These may include, but are not limited to, effects of supply chain disruptions and impacts on industry sectors that are affected by energy and other commodity prices or dependent on specific geographies.

We continue to monitor settlement risk on certain open transactions with Russian bank and non-bank counterparties or Russian underlyings, as market closures, the imposition of exchange controls, sanctions or other measures may further limit our ability to settle transactions or to realize on collateral, which may result in unexpected increases in exposures.

Russia’s invasion of Ukraine and the imposition of sanctions on Russia and Belarus have increased the risk of cyberattacks from foreign state actors, activists or other parties, which we are countering with heightened threat intelligence exchange and security monitoring.

UBS Optimus Foundation, through the UBS Ukraine Relief Fund, and together with our Community Impact teams, is working with key partners, such as the International Rescue Committee and Hope and Homes for Children, to provide critical support to victims of the war in Ukraine. As a result of increasing donations from clients and employees, we have partnered with XTX Markets to significantly extend our matching donation program with the aim of raising total donations of around USD 50 million. As of 21 April 2022, client and employee donations combined with commitments from UBS and XTX Markets have reached around USD 30 million.

Regulatory and legal developments

FINMA’s annual assessment of recovery and resolution plans

In March 2022, the Swiss Financial Market Supervisory Authority (FINMA) presented its annual assessment of the recovery and resolution plans of systemically important financial institutions in Switzerland. In its report, FINMA acknowledged the further progress that UBS has made with regard to its global resolvability by significantly reducing remaining obstacles to the implementation of its resolution strategy and making further improvements to its recovery plans. FINMA considered UBS’s global recovery plan and Swiss emergency plan to be effective, while identifying areas for further improvement that UBS will address in the course of 2022 and beyond.

Revision of the Swiss Liquidity Ordinance and introduction of a Swiss public liquidity backstop

The Swiss Federal Department of Finance (the FDF) launched a consultation on proposed revisions to the Swiss Liquidity Ordinance in September 2021, with the aim of strengthening the resilience of systemically important banks in Switzerland. As proposed, the revisions would increase the regulatory minimum liquidity requirements for systemically important banks, including UBS. The final rule is expected to become effective as of 1 July 2022 with a transition period, based on a review of the published consultation responses.

In conjunction with the revision of the Swiss Liquidity Ordinance, the Swiss Federal Council announced the key parameters for a public liquidity backstop in March 2022. The liquidity backstop would enable the Swiss government and the Swiss National Bank to support the liquidity of a systemically important bank domiciled in Switzerland in the process of resolution. The introduction of the backstop is intended to increase the confidence of market participants in the ability of systemically important banks to become successfully recapitalized and remain solvent in a crisis situation. The FDF is expected to issue a consultation by mid-2023.

Revisions to the Swiss Banking Ordinance

In April 2022, the FDF launched a consultation on proposed revisions to the Swiss Banking Ordinance that follows the amendment to the Banking Act adopted by the Swiss Parliament in December 2021, enacting insolvency provisions for banks into statutory law and strengthening the deposit insurance framework. It also sets out amendments that aim to replace the current resolvability discount on the gone concern capital requirements for systemically important banks with a capital surcharge for obstacles to the firm’s resolvability at the discretion of the authorities. The consultation period is scheduled to end on 15 July 2022. UBS is assessing the implications of the proposed revisions.

Developments regarding sustainability and climate risk

Sustainability and climate risk regulation continues to evolve rapidly in Switzerland, the US and the EU. In Switzerland, the Federal Council opened, in March 2022, a consultation on a proposal to require large Swiss companies to make disclosures as recommended by the Task Force on Climate-related Financial Disclosures (the TCFD).

In the US, the Securities and Exchange Commission (the SEC) has proposed regulations that would require UBS to include extensive climate-related disclosures in periodic reports beginning in 2024.

In the European Union, the European Commission (the EC) proposed draft legislation on corporate sustainability due diligence, requiring companies to identify and, where necessary, prevent, end, or mitigate adverse impacts of their activities on human rights and the environment. The EC also published a consultation aiming to gain a better understanding of the functioning of environmental, social and governance (ESG) ratings provided by specialized rating agencies. The European Securities and Markets Authority (ESMA) is consulting on revisions to the guidelines on the revised Markets in Financial Instruments Directive (MiFID II) suitability requirements focused on: (i) collection of information from clients regarding sustainability preferences; (ii) assessment of sustainability preferences; and (iii) organizational requirements.

On a global level, the International Sustainability Standards Board (the ISSB) launched a consultation in March 2022 on two of its proposed standards: one defining general sustainability-related disclosure requirements and the other specifying climate-related disclosure requirements.

UBS is assessing the implications of the proposed revisions and amendments.

Other developments

Capital returns

On 6 April 2022, the shareholders approved a dividend of USD 0.50 per share at the Annual General Meeting. The dividend was paid on 14 April 2022 to shareholders of record on 13 April 2022.

The 2021 share repurchase program was concluded on 29 March 2022. A total of 240.3 million UBS Group AG shares were acquired at an aggregate purchase price of CHF 3,810 million, of which 87.7 million shares were repurchased during the first quarter of 2022.

On 31 March 2022, we commenced a new 2022 share repurchase program of up to USD 6 billion over two years. We expect to execute around USD 5 billion of repurchases in aggregate under these programs in 2022. During the first quarter of 2022, we repurchased USD 1.7 billion of shares, including shares repurchased on 31 March 2022, which settled in April 2022.

› Refer to the “Share information and earnings per share” section of this report for more information

Ownership increase in UBS Securities China

In the first quarter of 2022, we increased our stake in UBS Securities China to 67% from 51%. The closing of the transaction did not affect profit or loss and there was no material effect on our common equity tier 1 (CET1) capital.

Sale of investment in Mitsubishi Corp.-UBS Realty Inc.

In March 2022, we signed an agreement to sell our investment in our Japanese real estate joint venture Mitsubishi Corp.-UBS Realty Inc. to KKR & Co. Inc. The closing of the transaction is subject to required filings and regulatory approvals and is expected in the second quarter of 2022. Our asset management, wealth management and investment banking businesses operating in Japan are not affected by the sale.

Upon closing of the transaction, we expect to record a gain in Asset Management and an increase in CET1 capital related to the sale of approximately USD 0.9 billion.

The French cross-border matter

On 13 December 2021, the French Court of Appeal found UBS AG guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud. Following a review with FINMA, we will reflect additional operational risk RWA of USD 4.1 billion related to this matter in the first half of 2022, of which USD 2.1 billion has been reflected in the first quarter of 2022.

› Refer to “Note 14 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this report for more information

Group performance

Income statement
	For the quarter ended			% change from
USD million	31.3.22	31.12.21	31.3.21	4Q21	1Q21
Net interest income	1,771	1,770	1,613	0	10
Other net income from financial instruments measured at fair value through profit or loss	2,226	1,365	1,309	63	70
Credit loss (expense) / release	(18)	27	28
Fee and commission income	5,837	6,042	6,169	(3)	(5)
Fee and commission expense	(484)	(513)	(478)	(6)	1
Net fee and commission income	5,353	5,529	5,691	(3)	(6)
Other income	32	40	64	(21)	(50)
Total operating income	9,363	8,732	8,705	7	8
Personnel expenses	4,920	4,216	4,801	17	2
General and administrative expenses	1,208	2,212	1,089	(45)	11
Depreciation, amortization and impairment of non-financial assets	506	574	517	(12)	(2)
Total operating expenses	6,634	7,003	6,407	(5)	4
Operating profit / (loss) before tax	2,729	1,729	2,298	58	19
Tax expense / (benefit)	585	370	471	58	24
Net profit / (loss)	2,144	1,359	1,827	58	17
Net profit / (loss) attributable to non-controlling interests	8	11	3	(26)	165
Net profit / (loss) attributable to shareholders	2,136	1,348	1,824	58	17

Comprehensive income
Total comprehensive income	(72)	1,178	(339)		(79)
Total comprehensive income attributable to non-controlling interests	26	7	(9)	271
Total comprehensive income attributable to shareholders	(98)	1,171	(330)		(70)

Results: 1Q22 vs 1Q21

Profit before tax increased by USD 431 million, or 19%, to USD 2,729 million, reflecting higher operating income, partly offset by higher operating expenses. Operating income increased by USD 658 million, or 8%, to USD 9,363 million, mainly reflecting a USD 1,075 million increase in total combined net interest income and other net income from financial instruments measured at fair value through profit or loss, largely as the first quarter of 2021 included a loss of USD 774 million on the default of a US-based client of our prime brokerage business. These effects were partly offset by USD 338 million lower net fee and commission income. Operating expenses increased by USD 227 million, or 4%, to USD 6,634 million, mainly reflecting USD 119 million higher personnel expenses and a USD 119 million increase in general and administrative expenses.

Operating income: 1Q22 vs 1Q21

Total operating income increased by USD 658 million, or 8%, to USD 9,363 million.

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 1,075 million to USD 3,997 million, mainly driven by the Investment Bank and Global Wealth Management.

The Investment Bank increased by USD 920 million to USD 2,004 million, largely reflecting USD 742 million higher net income in Financing, mainly due to the aforementioned loss in our prime brokerage business in the prior-year quarter. Derivatives & Solutions reflected USD 211 million higher net income as a result of higher revenues related to equity derivatives, rates and foreign exchange products, partly offset by lower credit revenues.

Global Wealth Management increased by USD 142 million to USD 1,442 million, driven by higher net interest income, reflecting increases in deposit and loan volumes, as well as higher deposit margins.

› Refer to “Note 3 Net interest income” in the “Consolidated financial statements” section of this report for more information about net interest income

Net interest income and other net income from financial instruments measured at fair value through profit or loss
	For the quarter ended			% change from
USD million	31.3.22	31.12.21	31.3.21	4Q21	1Q21
Net interest income from financial instruments measured at amortized cost and fair value through other comprehensive income	1,363	1,384	1,264	(2)	8
Net interest income from financial instruments measured at fair value through profit or loss	408	387	349	5	17
Other net income from financial instruments measured at fair value through profit or loss	2,226	1,365	1,309	63	70
Total	3,997	3,136	2,922	27	37
Global Wealth Management	1,442	1,357	1,300	6	11
of which: net interest income	*1,141*	1,114	997	2	14
of which: transaction-based income from foreign exchange and other intermediary activity¹	*301*	243	303	24	(1)
Personal & Corporate Banking	665	656	605	1	10
of which: net interest income	*535*	543	513	(1)	4
of which: transaction-based income from foreign exchange and other intermediary activity¹	*130*	113	92	15	41
Asset Management	(2)	(1)	(7)	100	(71)
Investment Bank²	2,004	1,253	1,084	60	85
Global Banking	*115*	154	143	(25)	(20)
Global Markets	*1,888*	1,099	941	72	101
Group Functions	(112)	(129)	(60)	(13)	87
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. 2 Investment Bank information is provided at the business-line level rather than by financial statement reporting line, in order to reflect the underlying business activities, which is consistent with the structure of the management discussion and analysis in the “Investment Bank” section of this report.

Group performance

Net fee and commission income

Net fee and commission income decreased by USD 338 million to USD 5,353 million.

Net brokerage fees decreased by USD 270 million to USD 1,020 million, reflecting lower levels of client activity in Global Wealth Management, particularly in Asia Pacific, as well as in the Investment Bank in relation to cash equities.

Underwriting fees decreased by USD 220 million to USD 172 million, largely driven by lower equity underwriting revenues from public offerings in the Investment Bank.

Fees for portfolio management and related services increased by USD 179 million to USD 2,463 million, largely driven by Global Wealth Management, reflecting net new fee-generating assets and positive market performance.

› Refer to “Note 4 Net fee and commission income” in the “Consolidated financial statements” section of this report for more information

Other income

Other income was USD 32 million, compared with USD 64 million in the prior-year quarter. The decrease mainly reflected a valuation loss of USD 23 million in Personal & Corporate Banking and Global Wealth Management related to UBS’s equity ownership of SIX Group, compared with a valuation gain of USD 37 million in the first quarter of 2021. This decrease was partly offset by gains related to the repurchase of UBS’s own debt instruments, compared with losses in the prior-year quarter.

Credit loss expense / release

Total net credit loss expenses were USD 18 million, compared with net credit loss releases of USD 28 million in the prior-year quarter, reflecting net expenses of USD 11 million related to stage 1 and 2 positions and net expenses of USD 7 million related to stage 3 positions.

› Refer to “Note 7 Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more information

Credit loss (expense) / release
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Management	Investment Bank	Group Functions	Total
For the quarter ended 31.3.22
Stages 1 and 2	5	(13)	0	(3)	0	(11)
Stage 3	2	(10)	0	0	0	(7)
Total credit loss (expense) / release	7	(23)	0	(4)	0	(18)

For the quarter ended 31.12.21
Stages 1 and 2	2	(4)	0	2	0	(1)
Stage 3	1	14	(1)	14	0	28
Total credit loss (expense) / release	2	10	(1)	16	0	27

For the quarter ended 31.3.21
Stages 1 and 2	4	16	0	5	0	26
Stage 3	(2)	8	0	(4)	0	3
Total credit loss (expense) / release	3	23	0	2	0	28

Operating expenses: 1Q22 vs 1Q21

Operating expenses increased by USD 227 million, or 4%, to USD 6,634 million.

Personnel expenses

Personnel expenses increased by USD 119 million to USD 4,920 million, largely reflecting USD 77 million higher expenses for salaries and variable compensation. This included net restructuring expenses of USD 49 million, compared with zero in the prior-year quarter. Variable compensation increased, partly offset by lower salary costs, reflecting foreign currency translation effects and a decrease in accruals for untaken vacation. In addition, financial advisor compensation increased by USD 50 million, resulting from higher compensable revenues.

› Refer to “Note 5 Personnel expenses” in the “Consolidated financial statements” section of this report for more information

General and administrative expenses

General and administrative expenses increased by USD 119 million to USD 1,208 million, largely driven by higher expenses for litigation, regulatory and similar matters, outsourcing, IT, and consulting.

We believe that the industry continues to operate in an environment in which expenses associated with litigation, regulatory and similar matters will remain elevated for the foreseeable future and we continue to be exposed to a number of significant claims and regulatory matters. The outcome of many of these matters, the timing of a resolution, and the potential effects of resolutions on our future business, financial results or financial condition are extremely difficult to predict.

› Refer to “Note 6 General and administrative expenses” in the “Consolidated financial statements” section of this report for more information

› Refer to “Note 14 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this report and to the “Regulatory and legal developments” and “Risk factors” sections of our Annual Report 2021 for more information about litigation, regulatory and similar matters

Operating expenses
	For the quarter ended			% change from
USD million	31.3.22	31.12.21	31.3.21	4Q21	1Q21
Personnel expenses	4,920	4,216	4,801	17	2
of which: salaries and variable compensation	*2,948*	2,283	2,871	29	3
of which: financial advisor compensation¹	*1,220*	1,269	1,170	(4)	4
of which: other personnel expenses²	*752*	665	759	13	(1)
General and administrative expenses	1,208	2,212	1,089	(45)	11
of which: net expenses for litigation, regulatory and similar matters	57	826	9	(93)	533
of which: other general and administrative expenses	*1,151*	1,386	1,080	(17)	6
Depreciation, amortization and impairment of non-financial assets	506	574	517	(12)	(2)
Total operating expenses	6,634	7,003	6,407	(5)	4
1 Financial advisor compensation consists of formulaic compensation based directly on compensable revenues generated by financial advisors and supplemental compensation calculated on the basis of financial advisor productivity, firm tenure, new assets and other variables. 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, and post-employment benefit plans, as well as other personnel expenses.

Tax: 1Q22 vs 1Q21

We recognized income tax expenses of USD 585 million for the first quarter of 2022, representing an effective tax rate of 21.4%, compared with USD 471 million for the first quarter of 2021 and an effective tax rate of 20.5%. Current tax expenses were USD 364 million, compared with USD 406 million, and related to taxable profits of UBS Switzerland AG and other entities. Deferred tax expenses were USD 221 million, compared with USD 65 million, and primarily related to the amortization of deferred tax assets previously recognized in relation to tax losses carried forward and deductible temporary differences of UBS Americas Inc. Excluding any potential effects from the remeasurement of deferred tax assets in connection with this year’s business planning process and any potential US corporate tax rate changes or other material jurisdictional statutory tax rate changes that could be enacted, we expect a tax rate for the remaining nine months of 2022 of around 21%. This reflects the effects of the limited tax expense impact in relation to the sale of our investment in Mitsubishi Corp.-UBS Realty Inc., which is expected to close in the second quarter of 2022.

› Refer to the “Recent developments” section of this report for more information about the sale of our investment in Mitsubishi Corp.-UBS Realty Inc.

Group performance

Total comprehensive income attributable to shareholders

In the first quarter of 2022, total comprehensive income attributable to shareholders was negative USD 98 million, reflecting net profit of USD 2,136 million and other comprehensive income (OCI), net of tax, of negative USD 2,234 million.

OCI related to cash flow hedges was negative USD 2,184 million, mainly reflecting net unrealized losses on US dollar hedging derivatives resulting from significant increases in the relevant US dollar long-term interest rates.

OCI associated with financial assets measured at fair value through OCI was negative USD 327 million, mainly reflecting net unrealized losses of USD 439 million following significant increases in the relevant US dollar long-term interest rates.

Foreign currency translation OCI was negative USD 263 million, mainly resulting from a weakening of the Swiss franc (1%) and the euro (3%) against the US dollar.

OCI related to own credit on financial liabilities designated at fair value was positive USD 423 million, primarily due to a widening of our own credit spreads.

OCI related to cost of hedging was positive USD 77 million, mainly driven by a widening of the US dollar / euro cross-currency basis that increased the fair value of the cross-currency swaps.

Defined benefit plan OCI was positive USD 40 million, reflecting positive net pre-tax OCI related to our non-Swiss pension plans of USD 264 million, mainly driven by the UK pension plan, partly offset by negative pre-tax OCI in our Swiss pension plan of USD 222 million. The negative pre-tax OCI in the Swiss pension plan was predominantly driven by an extraordinary employer contribution of USD 209 million that increased the gross plan assets and resulted in an offsetting OCI loss as no net pension asset could be recognized on the balance sheet as of 31 March 2022 due to the asset ceiling. As announced in 2018, UBS agreed to mitigate the effects from changes to the Swiss pension plan implemented in 2019 and contributed CHF 646 million (USD 698 million) in three installments in 2020, 2021 and 2022. The extraordinary contribution of USD 209 million in the first quarter of 2022 reflects the third and final installment paid.

› Refer to “Statement of comprehensive income” in the “Consolidated financial statements” section of this report for more information

› Refer to “Note 8 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 27 Post-employment benefit plans” in the “Consolidated financial statements” section of our Annual Report 2021 for more information about OCI related to defined benefit plans

Sensitivity to interest rate movements

As of 31 March 2022, we estimate that a parallel shift in yield curves by +100 basis points could lead to a combined increase in annual net interest income of approximately USD 1.7 billion in Global Wealth Management and Personal & Corporate Banking in the first year after such a shift. Of this increase, approximately USD 0.9 billion, USD 0.4 billion and USD 0.2 billion would result from changes in US dollar, Swiss franc and euro interest rates, respectively. A parallel shift in yield curves by –100 basis points could lead to a combined decrease in annual net interest income of approximately USD 1.1 billion in Global Wealth Management and Personal & Corporate Banking in the first year after such a shift, mainly driven by positions denominated in US dollars.

These estimates 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 March 2022 applied to our banking book. These estimates further assume no change to balance sheet size and structure, constant foreign exchange rates and no specific management action.

› Refer to the “Risk management and control” section of this report for information about interest rate risk in the banking book

Key figures and personnel

Below we provide an overview of selected key figures of the Group. For further information about key figures related to capital management, refer to the “Capital management” section of this report.

Cost / income ratio: 1Q22 vs 1Q21

The cost / income ratio was 70.7%, compared with 73.8%, reflecting an increase in income, partly offset by an increase in expenses. The cost / income ratio is measured based on income before credit loss expenses or releases.

Common equity tier 1 capital: 1Q22 vs 4Q21

During the first quarter of 2022, our common equity tier 1 (CET1) capital decreased by USD 0.7 billion to USD 44.6 billion, mainly as operating profit before tax of USD 2.7 billion was more than offset by share repurchases of USD 1.7 billion, dividend accruals of USD 0.4 billion, a USD 0.4 billion negative effect from financial assets at fair value through OCI with a life-to-date OCI loss, current tax expenses of USD 0.4 billion and negative effects from foreign currency translation and defined benefit plans of USD 0.3 billion and USD 0.1 billion, respectively.

Return on CET1 capital: 1Q22 vs 1Q21

The annualized return on CET1 capital (RoCET1) was 19.0%, compared with 18.2%, driven by higher net profit attributable to shareholders, partly offset by an increase in average CET1 capital.

Risk-weighted assets: 1Q22 vs 4Q21

Risk-weighted assets (RWA) increased by USD 9.8 billion to USD 312.0 billion, driven by increases from asset size and other movements of USD 7.7 billion, model updates of USD 3.1 billion, and regulatory add-ons of USD 0.7 billion, partly offset by a decrease from currency effects of USD 1.7 billion.

Common equity tier 1 capital ratio: 1Q22 vs 4Q21

Our CET1 capital ratio decreased 0.7 percentage points to 14.3%, reflecting a USD 9.8 billion increase in RWA and a decrease in CET1 capital of USD 0.7 billion.

Leverage ratio denominator: 1Q22 vs 4Q21

The leverage ratio denominator (LRD) increased by USD 4.1 billion to USD 1,073.0 billion, reflecting an increase in asset size and other movements of USD 14.1 billion, partly offset by a decrease due to currency effects of USD 10.0 billion.

Common equity tier 1 leverage ratio: 1Q22 vs 4Q21

Our CET1 leverage ratio decreased to 4.16% from 4.24%, due to the aforementioned decrease in CET1 capital and a USD 4.1 billion increase in LRD.

Going concern leverage ratio: 1Q22 vs 4Q21

Our going concern leverage ratio decreased to 5.6% from 5.7%, reflecting a decrease in going concern capital of USD 0.4 billion and the aforementioned increase in LRD.

Personnel: 1Q22 vs 4Q21

The number of personnel employed as of 31 March 2022 was broadly stable at 71,697 (full-time equivalents), a net increase of 312 compared with 31 December 2021.

Return on equity and CET1 capital
	As of or for the quarter ended
USD million, except where indicated	31.3.22	31.12.21	31.3.21

Net profit
Net profit attributable to shareholders	2,136	1,348	1,824

Equity
Equity attributable to shareholders	58,855	60,662	58,026
Less: goodwill and intangible assets	6,383	6,378	6,427
Tangible equity attributable to shareholders	52,472	54,283	51,599
Less: other CET1 deductions	7,878	9,003	11,173
CET1 capital	44,593	45,281	40,426

Return on equity
Return on equity (%)	14.3	8.9	12.4
Return on tangible equity (%)	16.0	10.0	14.0
Return on common equity tier 1 capital (%)	19.0	11.9	18.2

Outlook

Russia’s invasion of Ukraine has implications for the global economy and markets, increasing upward pressure on energy and commodity prices, as well as adding to concerns about disruptions to supply chains and the continuing effects of the pandemic and related restrictions, particularly in Asia Pacific. Elevated global inflation and tight labor markets in many countries have started to lead to more restrictive monetary policy, and this has become an additional concern for the market. Investor sentiment turned more cautious in the first quarter of 2022, as these factors raised questions around the sustainability and shape of the recovery, deglobalization and inflation.

While the path of economic growth has become much more uncertain, we expect growth in economic activity to continue, although increased uncertainty may continue to affect client activity levels and asset prices. Rising interest rates, notably US dollar rates, are expected to lead to higher net interest income.

Our clients value our capital strength and expert guidance, particularly in these uncertain times, and we remain focused on supporting them with advice and solutions.

Global Wealth Management

Global Wealth Management¹
	As of or for the quarter ended			% change from
USD million, except where indicated	31.3.22	31.12.21	31.3.21	4Q21	1Q21

Results
Net interest income	1,141	1,114	997	2	14
Recurring net fee income²	2,806	2,896	2,629	(3)	7
Transaction-based income²	954	807	1,183	18	(19)
Other income	3	5	37	(34)	(91)
Income	4,904	4,822	4,845	2	1
Credit loss (expense) / release	7	2	3	211	159
Total operating income	4,912	4,824	4,848	2	1
Total operating expenses	3,602	4,261	3,439	(15)	5
Business division operating profit / (loss) before tax	1,310	563	1,409	133	(7)

Performance measures and other information
Pre-tax profit growth (year-on-year, %)²	(7.0)	(34.8)	15.7
Cost / income ratio (%)²	73.4	88.4	71.0
Average attributed equity (USD billion)³	19.9	19.3	18.3	3	9
Return on attributed equity (%)^2,3	26.3	11.6	30.8
Financial advisor compensation⁴	1,220	1,269	1,170	(4)	4
Net new fee-generating assets (USD billion)²	19.4	26.9	36.2
Fee-generating assets (USD billion)²	1,414	1,482	1,328	(5)	6
Fee-generating asset margin (bps)²	81.6	80.5	86.0
Invested assets (USD billion)²	3,145	3,303	3,108	(5)	1
Loans, gross (USD billion)⁵	230.3	234.1	219.4	(2)	5
Customer deposits (USD billion)⁵	372.3	369.8	336.7	1	11
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)^2,6	0.2	0.2	0.3
Advisors (full-time equivalents)	9,300	9,329	9,582	0	(3)
1 Comparatives may differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 Refer to the “Capital management” section of this report for more information. 4 Relates to licensed professionals with the ability to provide investment advice to clients in the Americas. Consists of formulaic compensation based directly on compensable revenues generated by financial advisors and supplemental compensation calculated on the basis of financial advisor productivity, firm tenure, new assets and other variables. It also includes expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. 5 Loans and Customer deposits in this table include customer brokerage receivables and payables, respectively, which are presented in a separate reporting line on the balance sheet. 6 Refer to the “Risk management and control” section of this report for more information about (credit-)impaired exposures. Excludes loans to financial advisors.

Global Wealth Management

Regional breakdown of performance measures
As of or for the quarter ended 31.3.22 USD billion, except where indicated	Americas¹	Switzerland	EMEA²	Asia Pacific	Global Wealth Management³
Total operating income (USD million)	2,705	514	988	709	4,912
Operating profit / (loss) before tax (USD million)	439	249	347	288	1,310
Cost / income ratio (%)⁴	84.1	51.3	64.9	59.3	73.4
Loans, gross	95.7⁵	43.5	45.4	45.1	230.3
Net new loans	3.7	0.9	(1.0)	(3.1)	0.5
Fee-generating assets⁴	864	125	313	110	1,414
Net new fee-generating assets⁴	12.0	3.0	4.0	0.4	19.4
Net new fee-generating asset growth rate (%)⁴	5.4	9.2	4.8	1.3	5.2
Invested assets⁴	1,772	270	605	494	3,145
Advisors (full-time equivalents)	6,199	686	1,472	861	9,300
1 Including the following business units: United States and Canada; and Latin America. 2 Including the following business units: Europe; Central & Eastern Europe, Greece and Israel; and Middle East and Africa. 3 Including minor functions, which are not included in the four regions individually presented in this table, with total operating income of negative USD 5 million, USD 13 million of operating loss before tax, USD 0.6 billion of loans, USD 0.0 billion of net new loan inflows, USD 0.9 billion of fee-generating assets, USD 0.0 billion of net new fee-generating asset outflows, USD 3 billion of invested assets and 82 advisors in the first quarter of 2022. 4 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 5 Loans include customer brokerage receivables, which are presented in a separate reporting line on the balance sheet.

Regional comments 1Q22 vs 1Q21, except where indicated

Americas

Profit before tax decreased by USD 28 million to USD 439 million. Total operating income increased by USD 158 million, or 6%, to USD 2,705 million, mainly driven by higher recurring net fee and net interest income. The cost / income ratio increased to 84.1% from 81.7%. Loans increased 4% compared with the fourth quarter of 2021, to USD 96 billion, reflecting USD 3.7 billion of net new loans, which were mostly mortgages and Lombard loans. Net new fee-generating assets were USD 12.0 billion, resulting in an annualized net new fee-generating asset growth rate of 5.4%.

Switzerland

Profit before tax increased by USD 58 million to USD 249 million. Total operating income increased by USD 49 million, or 11%, to USD 514 million, mainly driven by higher net interest, recurring net fee and transaction-based income. The cost / income ratio decreased to 51.3% from 59.0%. Loans increased 1% compared with the fourth quarter of 2021, to USD 43 billion, reflecting USD 0.9 billion of net new loans. Net new fee-generating assets were USD 3.0 billion, resulting in an annualized net new fee-generating asset growth rate of 9.2%.

EMEA

Profit before tax increased by USD 60 million to USD 347 million. Total operating income increased by USD 36 million, or 4%, to USD 988 million, mainly driven by higher net interest and recurring net fee income. The cost / income ratio decreased to 64.9% from 69.9%. Loans decreased 8% compared with the fourth quarter of 2021, to USD 45 billion, reflecting a reduction in Lombard lending, net new loan outflows and negative foreign exchange effects. Net new fee-generating assets were USD 4.0 billion, resulting in an annualized net new fee-generating asset growth rate of 4.8%.

Asia Pacific

Profit before tax decreased by USD 180 million to USD 288 million. Total operating income decreased by USD 172 million, or 20%, to USD 709 million, mainly driven by lower transaction-based income. The cost / income ratio increased to 59.3% from 46.9%. Loans decreased 7% compared with the fourth quarter of 2021, to USD 45 billion, reflecting USD 3.1 billion of net new loan outflows as the current market uncertainty led to clients deleveraging. Net new fee-generating assets were USD 0.4 billion, resulting in an annualized net new fee-generating asset growth rate of 1.3%.

Personal & Corporate Banking

Personal & Corporate Banking – in Swiss francs¹
	As of or for the quarter ended			% change from
CHF million, except where indicated	31.3.22	31.12.21	31.3.21	4Q21	1Q21

Results
Net interest income	493	497	470	(1)	5
Recurring net fee income²	210	205	182	2	15
Transaction-based income²	300	271	239	10	25
Other income	(1)	12	38
Income	1,002	985	929	2	8
Credit loss (expense) / release	(21)	9	22
Total operating income	981	995	950	(1)	3
Total operating expenses	586	660	593	(11)	(1)
Business division operating profit / (loss) before tax	395	335	358	18	10

Performance measures and other information
Pre-tax profit growth (year-on-year, %)²	10.4	5.1	11.0
Cost / income ratio (%)²	58.5	67.0	63.8
Average attributed equity (CHF billion)³	8.7	8.5	8.3	2	5
Return on attributed equity (%)^2,3	18.2	15.8	17.3
Net interest margin (bps)²	141	143	137
Fee and trading income for Corporate & Institutional Clients²	221	190	192	17	16
Investment products for Personal Banking (CHF billion)²	23.1	23.5	20.9	(2)	10
Net new investment products for Personal Banking (CHF billion)²	0.97	0.26	0.85
Active Digital Banking clients in Personal Banking (%)^2,4	73.2	71.7	69.4
Active Mobile Banking clients in Personal Banking (%)²	52.1	49.6	44.2
Active Digital Banking clients in Corporate & Institutional Clients (%)²	80.2	79.7	79.3
Loans, gross (CHF billion)	141.3	139.3	138.1	1	2
Customer deposits (CHF billion)	161.5	162.1	162.5	0	(1)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)^2,5	0.8	0.9	1.1
1 Comparatives may differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 Refer to the “Capital management” section of this report for more information. 4 In the first quarter of 2022, 84.8% of clients of Personal Banking were “activated users” of Digital Banking (i.e., clients who had logged into Digital Banking at least once in the course of their relationship with UBS). 5 Refer to the “Risk management and control” section of this report for more information about (credit)-impaired exposures.

Personal & Corporate Banking

Results: 1Q22 vs 1Q21

Profit before tax increased by CHF 37 million, or 10%, to CHF 395 million, reflecting higher operating income and lower operating expenses.

Operating income

Total operating income increased by CHF 31 million, or 3%, to CHF 981 million, reflecting a CHF 112 million increase from strong business momentum, with higher transaction-based, recurring net fee and net interest income, partly offset by a CHF 16 million valuation loss compared with a CHF 26 million gain in the first quarter of 2021. The first quarter of 2022 included net credit loss expenses of CHF 21 million, compared with CHF 22 million net credit loss releases in the same quarter of the prior year.

Net interest income increased by CHF 23 million to CHF 493 million, mainly driven by deposit management actions that led to higher deposit fees and a decrease in liquidity and funding costs. Growth in loans more than offset the impact from pressure on margins.

Recurring net fee income increased by CHF 28 million to CHF 210 million, mostly driven by higher revenues from mandate, custody and investment fund fees, mainly due to an increase in average custody assets largely reflecting net new investment product inflows, as well as higher revenues from account fees.

Transaction-based income increased by CHF 61 million to CHF 300 million, mainly driven by higher revenues from credit card and foreign exchange transactions, including the effects of a continued increase in spending on travel and leisure by clients following the easing of COVID-19-related restrictions in certain countries.

Other income was negative CHF 1 million, compared with positive CHF 38 million, mostly due to a valuation loss of CHF 16 million on our equity ownership of SIX Group, compared with a gain of CHF 26 million in the first quarter of 2021.

Net credit loss expenses were CHF 21 million, compared with net releases of CHF 22 million for the first quarter of 2021.

Operating expenses

Total operating expenses decreased by CHF 7 million, or 1%, to CHF 586 million, mainly due to lower real estate expenses for our branch network, as the first quarter of 2021 included accelerated depreciation resulting from the closure of 44 branches in that quarter. This decrease was partly offset by higher investments in technology.

Personal & Corporate Banking – in US dollars¹
	As of or for the quarter ended			% change from
USD million, except where indicated	31.3.22	31.12.21	31.3.21	4Q21	1Q21

Results
Net interest income	535	543	513	(2)	4
Recurring net fee income²	227	224	198	2	15
Transaction-based income²	325	296	261	10	25
Other income	(1)	13	41
Income	1,086	1,077	1,013	1	7
Credit loss (expense) / release	(23)	10	23
Total operating income	1,064	1,086	1,037	(2)	3
Total operating expenses	635	721	647	(12)	(2)
Business division operating profit / (loss) before tax	428	365	389	17	10

Performance measures and other information
Pre-tax profit growth (year-on-year, %)²	10.0	3.5	16.5
Cost / income ratio (%)²	58.5	67.0	63.9
Average attributed equity (USD billion)³	9.4	9.2	9.1	2	3
Return on attributed equity (%)^2,3	18.2	15.9	17.1
Net interest margin (bps)²	140	144	137
Fee and trading income for Corporate & Institutional Clients²	240	207	209	16	15
Investment products for Personal Banking (USD billion)²	25.0	25.8	22.2	(3)	13
Net new investment products for Personal Banking (USD billion)²	1.05	0.28	0.92
Active Digital Banking clients in Personal Banking (%)^2,4	73.2	71.7	69.4
Active Mobile Banking clients in Personal Banking (%)²	52.1	49.6	44.2
Active Digital Banking clients in Corporate & Institutional Clients (%)²	80.2	79.7	79.3
Loans, gross (USD billion)	152.9	152.8	146.0	0	5
Customer deposits (USD billion)	174.8	177.8	171.9	(2)	2
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)^2,5	0.8	0.9	1.1
1 Comparatives may differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 Refer to the “Capital management” section of this report for more information. 4 In the first quarter of 2022, 84.8% of clients of Personal Banking were “activated users” of Digital Banking (i.e., clients who had logged into Digital Banking at least once in the course of their relationship with UBS). 5 Refer to the “Risk management and control” section of this report for more information about (credit)-impaired exposures.

Asset Management

Asset Management¹
	As of or for the quarter ended			% change from
USD million, except where indicated	31.3.22	31.12.21	31.3.21	4Q21	1Q21

Results
Net management fees²	561	627	545	(11)	3
Performance fees	17	94	92	(82)	(82)
Credit loss (expense) / release	0	(1)	0
Total operating income	578	721	637	(20)	(9)
Total operating expenses	404	387	410	4	(2)
Business division operating profit / (loss) before tax	174	334	227	(48)	(23)

Performance measures and other information
Pre-tax profit growth (year-on-year, %)³	(23.1)	(16.7)	44.7
Cost / income ratio (%)³	69.8	53.6	64.4
Average attributed equity (USD billion)⁴	1.8	1.8	2.2	(1)	(21)
Return on attributed equity (%)^3,4	39.5	74.6	40.8
Gross margin on invested assets (bps)³	20	24	23

Information by business line / asset class
Net new money (USD billion)³
Equities	(2.4)	5.8	6.4
Fixed Income	4.1	7.5	13.5
of which: money market	*(6.5)*	(1.1)	4.3
Multi-asset & Solutions	4.0	1.1	3.7
Hedge Fund Businesses	1.6	1.3	2.0
Real Estate & Private Markets	0.4	(0.7)	0.6
Total net new money	7.7	15.1	26.2
of which: net new money excluding money market	*14.2*	16.2	21.9

Invested assets (USD billion)³
Equities	537	580	526	(7)	2
Fixed Income	277	285	279	(3)	(1)
of which: money market	86	92	101	(7)	(15)
Multi-asset & Solutions	185	193	175	(4)	5
Hedge Fund Businesses	56	55	50	2	11
Real Estate & Private Markets	99	98	92	1	8
Total invested assets	1,154	1,211	1,121	(5)	3
of which: passive strategies	*516*	540	469	(5)	10

Information by region
Invested assets (USD billion)³
Americas	278	287	267	(3)	4
Asia Pacific	175	190	185	(8)	(5)
Europe, Middle East and Africa (excluding Switzerland)	315	334	305	(6)	3
Switzerland	386	399	364	(3)	6
Total invested assets	1,154	1,211	1,121	(5)	3

Information by channel
Invested assets (USD billion)³
Third-party institutional	672	707	656	(5)	2
Third-party wholesale	137	145	133	(6)	3
UBS’s wealth management businesses	345	359	332	(4)	4
Total invested assets	1,154	1,211	1,121	(5)	3
1 Comparatives may differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 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. 3 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 4 Refer to the “Capital management” section of this report for more information.

Investment Bank

Investment Bank¹
	As of or for the quarter ended			% change from
USD million, except where indicated	31.3.22	31.12.21	31.3.21	4Q21	1Q21

Results
Advisory	216	196	223	10	(3)
Capital Markets	334	501	565	(33)	(41)
Global Banking	550	696	788	(21)	(30)
Execution Services	496	452	555	10	(11)
Derivatives & Solutions	1,418	622	1,246	128	14
Financing	444	448	(319)	(1)
Global Markets	2,358	1,523	1,483	55	59
of which: Equities	*1,705*	1,107	920	54	85
of which: Foreign Exchange, Rates and Credit	*653*	415	563	57	16
Income	2,908	2,219	2,271	31	28
Credit loss (expense) / release	(4)	16	2
Total operating income	2,905	2,235	2,273	30	28
Total operating expenses	1,976	1,522	1,862	30	6
Business division operating profit / (loss) before tax	929	713	412	30	126

Performance measures and other information
Pre-tax profit growth (year-on-year, %)²	125.6	34.7	(41.9)
Cost / income ratio (%)²	67.9	68.6	82.0
Average attributed equity (USD billion)³	13.2	13.2	13.0	(1)	2
Return on attributed equity (%)^2,3	28.2	21.5	12.7
Average VaR (1-day, 95% confidence, 5 years of historical data)	10	10	11	2	(1)
1 Comparative figures in this table may differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 Refer to the “Capital management” section of this report for more information.

Group Functions

Group Functions¹
	As of or for the quarter ended			% change from
USD million, except where indicated	31.3.22	31.12.21	31.3.21	4Q21	1Q21

Results
Total operating income	(95)	(134)	(90)	(29)	5
Total operating expenses	18	113	49	(84)	(64)
Operating profit / (loss) before tax	(112)	(246)	(139)	(54)	(19)
of which: Group Treasury	*(162)*	(142)	(104)	14	55
of which: Non-core and Legacy Portfolio	45	(35)	5		860
of which: Group Services	5	(69)	(39)
1 Comparatives may differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period.

Results: 1Q22 vs 1Q21

Group Functions recorded a loss before tax of USD 112 million, compared with a loss of USD 139 million.

Group Treasury

The Group Treasury result was negative USD 162 million, compared with negative USD 104 million.

Income from accounting asymmetries, including hedge accounting ineffectiveness, was net negative USD 138 million, compared with net negative income of USD 92 million. Accounting asymmetries are generally expected to mean revert to zero over time.

Income related to centralized Group Treasury risk management was negative USD 17 million, compared with negative USD 2 million.

Operating expenses decreased by USD 6 million to USD 7 million.

Non-core and Legacy Portfolio

The Non-core and Legacy Portfolio result was positive USD 45 million, compared with positive USD 5 million. This result was mainly due to valuation gains of USD 51 million on our USD 1.6 billion portfolio of auction rate securities (ARS). Our remaining exposures to ARS were all rated investment grade as of 31 March 2022.

Group Services

The Group Services result was positive USD 5 million, compared with negative USD 39 million, mainly related to lower expenses relating to our legal entity transformation program.

Selected financial information of our business divisions and Group Functions

Performance of our business divisions and Group Functions¹
	For the quarter ended 31.3.22
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Manage- ment	Investment Bank	Group Functions	Total
Operating income	4,912	1,064	578	2,905	(95)	9,363

Operating expenses	3,602	635	404	1,976	18	6,634
of which: net restructuring expenses	17	7	1	23	0	49

Operating profit / (loss) before tax	1,310	428	174	929	(112)	2,729

	For the quarter ended 31.12.21
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Manage- ment	Investment Bank	Group Functions	Total
Operating income	4,824	1,086	721	2,235	(134)	8,732

Operating expenses	4,261	721	387	1,522	113	7,003
of which: net restructuring expenses	23	4	4	27	2	60

Operating profit / (loss) before tax	563	365	334	713	(246)	1,729

	For the quarter ended 31.3.21
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Manage- ment	Investment Bank	Group Functions	Total
Operating income	4,848	1,037	637	2,273	(90)	8,705

Operating expenses	3,439	647	410	1,862	49	6,407

Operating profit / (loss) before tax	1,409	389	227	412	(139)	2,298
1 The “of which” components of operating income and operating expenses disclosed in this table are items that are not recurring or necessarily representative of the underlying business performance for the reporting period specified.

Risk management and control

This section provides information about key developments during the reporting period and should be read in conjunction with the “Risk management and control” section of our Annual Report 2021.

Credit risk

Credit loss (expense) / release
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Management	Investment Bank	Group Functions	Total
For the quarter ended 31.3.22
Stages 1 and 2	5	(13)	0	(3)	0	(11)
Stage 3	2	(10)	0	0	0	(7)
Total credit loss (expense) / release	7	(23)	0	(4)	0	(18)

For the quarter ended 31.12.21
Stages 1 and 2	2	(4)	0	2	0	(1)
Stage 3	1	14	(1)	14	0	28
Total credit loss (expense) / release	2	10	(1)	16	0	27

Credit loss expense / release

Total net credit loss expenses were USD 18 million, reflecting net expenses of USD 11 million related to stage 1 and 2 positions and net expenses of USD 7 million related to stage 3 positions.

› Refer to “Note 7 Expected credit loss measurement” in the “Consolidated financial statements” section of this report for more information about credit loss expense / release

› Refer to “Note 1 Summary of material accounting policies,” “Note 9 Financial assets at amortized cost and other positions in scope of expected credit loss measurement” and “Note 20 Expected credit loss measurement” in the “Consolidated financial statements” section of our Annual Report 2021 for information about scenario updates

Overall banking products exposures

Overall banking products exposure increased by USD 13 billion, to USD 706 billion as of 31 March 2022, driven by a USD 14 billion increase in balances at central banks. This was partially offset as total loans and advances to customers in Global Wealth Management decreased by USD 3.9 billion, to USD 225 billion, driven by our Lombard portfolio, mainly due to clients in Asia Pacific deleveraging and a reduction of exposures to Russia-related borrowers.

Credit-impaired gross exposure decreased by USD 116 million to USD 2,494 million, with decreases across Global Wealth Management and Personal & Corporate Banking.

In aggregate, exposure related to traded products increased by USD 6.7 billion to USD 53.0 billion during the first quarter of 2022, mainly due to higher levels of market volatility impacting existing portfolios in the Investment Bank.

Loan underwriting

In the Investment Bank, the loan underwriting business experienced a lower level of origination activity compared with prior quarters in 2021. As of 31 March 2022, mandated loan underwriting commitments totaled USD 3.0 billion on a notional basis (compared with USD 6.6 billion as of 31 December 2021). As of 31 March 2022, USD 0.4 billion of commitments had not yet been distributed as originally planned.

Loan underwriting exposures are classified as held for trading, with fair values reflecting the market conditions at the end of the quarter. Credit hedges are in place to help protect against fair value movements in the portfolio.

Credit exposure to commodity markets

Russia’s invasion of Ukraine has implications for the global economy and markets, with upward pressure on energy and other commodity prices, as well as heightened concerns about disruptions to supply chains beyond direct impacts on Russia or Ukraine.

Our commodity trade finance portfolio in Personal & Corporate Banking 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 9 billion (CHF 8 billion) as of 31 March 2022, compared with USD 8 billion (CHF 7 billion) as of 31 December 2021, with the change mainly driven by the appreciation of commodity prices.

UBS is monitoring the situation closely. While the unusually high market volatility impacted some commodity traders’ liquidity in early March, they took additional measures to secure their liquidity position. Meanwhile, the situation for commodity traders has further stabilized following a reduction in commodity prices and volatility levels.

Risk, capital, liquidity and funding, and balance sheet | Risk management and control

Banking and traded products exposure in our business divisions and Group Functions
	31.3.22
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Management	Investment Bank	Group Functions	Total
Banking products¹
Gross exposure	343,285	233,355	1,680	76,267	51,780	706,367
of which: loans and advances to customers (on-balance sheet)	*224,675*	*152,898*	0	*13,555*	*1,862*	*392,990*
of which: guarantees and loan commitments (off-balance sheet)	*10,303*	*28,794*	5	*14,380*	*7,053*	*60,535*
Traded products^2,3
Gross exposure	10,109	505	0	42,382		52,997
of which: over-the-counter derivatives	*7,687*	*485*	0	*14,622*		*22,793*
of which: securities financing transactions	0	0	0	*20,331*		*20,331*
of which: exchange-traded derivatives	*2,423*	20	0	*7,429*		*9,872*
Other credit lines, gross⁴	12,220	22,686	0	6,380	110	41,396

Total credit-impaired exposure, gross (stage 3)	685	1,550	0	259	0	2,494
Total allowances and provisions for expected credit losses (stages 1 to 3)	253	703	0	189	3	1,148
of which: stage 1	82	*127*	0	62	3	*275*
of which: stage 2	42	*153*	0	39	0	*234*
of which: stage 3 (allowances and provisions for credit-impaired exposures)	*130*	*422*	0	88	0	*639*

	31.12.21
USD million	Global Wealth Management	Personal & Corporate Banking	Asset Management	Investment Bank	Group Functions	Total
Banking products¹
Gross exposure	337,266	229,334	1,520	59,352	65,514	692,985
of which: loans and advances to customers (on-balance sheet)	228,598	152,847	0	13,720	3,445	398,611
of which: guarantees and loan commitments (off-balance sheet)	10,772	29,737	0	14,994	4,947	60,450
Traded products^2,3
Gross exposure	9,582	783	0	35,950		46,314
of which: over-the-counter derivatives	7,186	766	0	9,767		17,719
of which: securities financing transactions	0	0	0	18,566		18,566
of which: exchange-traded derivatives	2,396	17	0	7,617		10,030
Other credit lines, gross⁴	12,947	24,174	0	3,629	28	40,778

Total credit-impaired exposure, gross (stage 3)	729	1,617	0	264	0	2,610
Total allowances and provisions for expected credit losses (stages 1 to 3)	264	709	0	188	4	1,165
of which: stage 1	89	126	0	64	4	282
of which: stage 2	41	146	0	34	0	220
of which: stage 3 (allowances and provisions for credit-impaired exposures)	135	438	0	90	0	662
1 IFRS 9 gross exposure including other financial assets at amortized cost, but excluding cash, receivables from securities financing transactions, cash collateral receivables on derivative instruments, financial assets at FVOCI, irrevocable committed prolongation of existing loans and unconditionally revocable committed credit lines, and forward starting reverse repurchase and securities borrowing agreements. 2 Internal management view of credit risk, which differs in certain respects from IFRS. 3 As counterparty risk for traded products is managed at counterparty level, no further split between exposures in the Investment Bank and Group Functions is provided. 4 Unconditionally revocable committed credit lines.

Global Wealth Management and Personal & Corporate Banking loans and advances to customers, gross¹
	Global Wealth Management		Personal & Corporate Banking
USD million	31.3.22	31.12.21	31.3.22	31.12.21
Secured by residential real estate	59,894	58,655	109,484	110,041
Secured by commercial / industrial real estate	3,877	3,338	18,701	18,878
Secured by cash	36,286	34,175	3,007	3,114
Secured by securities	108,809	115,901	2,048	2,214
Secured by guarantees and other collateral	13,725	14,138	7,136	7,435
Unsecured loans and advances to customers	2,084	2,391	12,521	11,166
Total loans and advances to customers, gross	224,675	228,598	152,898	152,847
Allowances

“UBS,” “UBS Group,” “UBS Group AG consolidated,” “Group,” “the Group,” “we,” “us” and “our”	UBS Group AG and its consolidated subsidiaries
“UBS AG consolidated”	UBS AG and its consolidated subsidiaries
“UBS Group AG” and “UBS Group AG standalone”	UBS Group AG on a standalone basis
“UBS AG” and “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 consolidated”	UBS Europe SE and its consolidated subsidiaries
“UBS Americas Holding LLC” and “UBS Americas Holding LLC consolidated”	UBS Americas Holding LLC and its consolidated subsidiaries

27	Risk management and control
27	Credit risk
29	Market risk
30	Country risk
30	Non-financial risk

32	Capital management
33	Swiss SRB requirements and information
34	Total loss-absorbing capacity
38	Risk-weighted assets
40	Leverage ratio denominator
42	Equity attribution and return on attributed equity

43	Liquidity and funding management
43	Strategy, objectives and governance
43	Liquidity coverage ratio
43	Net stable funding ratio

44	Balance sheet and off-balance sheet
44	Strategy, objectives and governance
44	Balance sheet assets
44	Balance sheet liabilities
45	Equity
46	Off-balance sheet

47	Share information and earnings per share