UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

Date: November 7, 2023

UBS AG

(Registrant's Name)

Bahnhofstrasse 45, 8001 Zurich, Switzerland

Aeschenvorstadt 1, 4051 Basel, Switzerland 

(Address of principal executive offices)

Commission File Number: 1-15060

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form

40-

F.

Form 20-F 

☒

 Form 40-F 

☐

This Form 6-K consists of the Third Quarter 2023 Report of UBS AG, which appears immediately following this

page.

 UBS AG

Third

quarter

2023

report

Corporate calendar UBS AG

Publication of the fourth quarter 2023 report Tuesday, 6 February 2024

Publication of the Annual Report 2023 Thursday, 28 March 2024 

Publication of the first quarter 2024 report Tuesday, 7 May 2024

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.

Contacts

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

Imprint

Publisher: UBS AG, Zurich, Switzerland | ubs.com

Language: English

© UBS 2023. The key symbol and UBS are among the registered and unregistered

trademarks of UBS. All rights reserved.

1.

UBS AG

4

6

2.

Business divisions and 

Group Items

13

15

17

19

21

22

3.

Risk, capital, liquidity and funding,

and balance sheet

24

30

37

38

4.

Consolidated 

financial statements

42

Appendix

72

76

78

79

UBS AG third quarter 2023 report

 2

Terms used in this report, unless the context requires otherwise

“UBS,” “UBS Group,” “UBS Group AG consolidated,” “Group,” “the Group,” “we,” “us” and “our”

UBS Group AG and its consolidated subsidiaries

“UBS AG” and “UBS AG consolidated” 

UBS AG and its consolidated subsidiaries

“Credit Suisse AG” and “Credit Suisse AG consolidated”

Credit Suisse AG and its consolidated subsidiaries

“Credit Suisse Group“ and “Credit Suisse Group AG consolidated”

Pre-acquisition Credit Suisse Group

”Credit Suisse” 

Credit Suisse AG and its consolidated subsidiaries, Credit Suisse

Services AG and other small former Credit Suisse Group entities now

directly held by UBS Group AG

“UBS Group AG” and “UBS Group AG standalone” 

UBS Group AG on a standalone basis

“Credit Suisse Group AG” and “Credit Suisse Group AG standalone”

Credit Suisse Group AG on a standalone basis

“UBS AG standalone” 

UBS AG on a standalone basis

“Credit Suisse AG standalone”

Credit Suisse 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

“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.

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. A number of APMs are reported in UBS’s external reports

(annual, quarterly and other reports). APMs are used to provide a more complete picture of operating performance

and to reflect management’s view of the fundamental drivers of the 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. These APMs may qualify as non-GAAP measures as defined by US Securities and

Exchange Commission (SEC) regulations.

UBS AG third quarter 2023 report

 3

UBS AG consolidated key figures

UBS AG consolidated key figures

As of or for the quarter ended 

As of or year-to-date

USD m, except where indicated

30.9.23

30.6.23

31.12.22

30.9.22

30.9.23

30.9.22

Results

Total revenues

 8,348

 8,468

 8,078

 8,308

 25,661

 26,838

Credit loss expense / (release)

 27

 16

 7

 (3)

 80

 22

Operating expenses

 7,047

 6,997

 6,282

 6,152

 21,393

 19,644

Operating profit / (loss) before tax

 1,275

 1,456

 1,788

 2,159

 4,188

 7,171

Net profit / (loss) attributable to shareholders

 932

 1,120

 1,518

 1,598

 3,055

 5,566

Profitability and growth

1

Return on equity (%)

 7.0

 8.0

 10.9

 11.7

 7.4

 13.2

Return on tangible equity (%)

 8.0

 9.1

 12.3

 13.2

 8.3

 14.8

Return on common equity tier 1 capital (%)

 8.6

 10.4

 14.3

 15.2

 9.5

 17.7

Return on leverage ratio denominator, gross (%)

 3.2

 3.3

 3.2

 3.3

 3.3

 3.4

Cost / income ratio (%)

 84.4

 82.6

 77.8

 74.0

 83.4

 73.2

Net profit growth (%)

 (41.7)

 (43.0)

 20.9

 (25.8)

 (45.1)

 (3.6)

Resources

Total assets

 1,097,536

 1,096,318

 1,105,436

 1,111,926

 1,097,536

 1,111,926

Equity attributable to shareholders

 52,836

 52,922

 56,598

 54,610

 52,836

 54,610

Common equity tier 1 capital

2

 43,378

 43,300

 42,929

 42,064

 43,378

 42,064

Risk-weighted assets

2

 321,134

 323,406

 317,823

 308,571

 321,134

 308,571

Common equity tier 1 capital ratio (%)

2

 13.5

 13.4

 13.5

 13.6

 13.5

 13.6

Going concern capital ratio (%)

2

 17.1

 17.0

 17.2

 18.1

 17.1

 18.1

Total loss-absorbing capacity ratio (%)

2

 33.8

 33.0

 32.0

 32.8

 33.8

 32.8

Leverage ratio denominator

2

 1,042,106

 1,048,313

 1,029,561

 989,909

 1,042,106

 989,909

Common equity tier 1 leverage ratio (%)

2

 4.2

 4.1

 4.2

 4.2

 4.2

 4.2

Liquidity coverage ratio (%)

3

 176.6

 170.9

 176.6

Net stable funding ratio (%)

 121.7

 118.2

 121.7

Other

Invested assets (USD bn)

1,4,5

 4,227

 4,310

 3,981

 3,731

 4,227

 3,731

Personnel (full-time equivalents)

 48,015

 47,889

 47,628

 47,429

 48,015

 47,429

1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 2 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. 3 The disclosed ratios represent quarterly averages for the quarters presented and are calculated based on an average of 63 data points in the

third quarter of 2023 and 15 data points in the second quarter of 2023. Refer to the “Liquidity and funding management” section of this report for more information. 4 Consists of invested assets for Global Wealth

Management, Asset Management and Personal & Corporate Banking. Refer to “Note 31 Invested assets and net new money” in the “UBS AG consolidated financial statements” section of the Annual Report 2022

for more information. 5 Starting with the second quarter of 2023, invested assets include invested assets from associates in the Asset Management business division, to better reflect the business strategy.

Comparative figures have been restated to reflect this change. 

UBS AG third quarter 2023 report |

UBS AG | Recent developments 4

UBS AG

Management report

Recent developments

Integration of Credit Suisse

We aim to substantially complete the integration for the Group by the end of 2026 and to achieve gross cost

reductions of over USD 10bn by that time compared with the pre-acquisition 2022 combined cost base of UBS and

Credit Suisse. We plan to merge UBS AG with Credit Suisse AG and Credit Suisse (Schweiz) AG with UBS Switzerland

AG in 2024 and to transition to a single US intermediate holding company in the first half of 2024. The client

migration to a combined platform for UBS Switzerland AG and Credit Suisse (Schweiz) AG is targeted for 2025. 

Starting with the third quarter of 2023, we report five business divisions in line with International Financial Reporting

Standards (IFRS), reflecting the way we are managing our businesses and engaging with clients: Global Wealth

Management, Personal & Corporate Banking, Asset Management, the Investment Bank, and Non-core and Legacy.

We separately report Group Items.

›

Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial

statements” section of the UBS Group third quarter 2023 report for more information

Regulatory and legal developments

Introduction of a public liquidity backstop in Switzerland

In September 2023, the Swiss Federal Council adopted a dispatch and draft legislation on the introduction of a

public liquidity backstop (a PLB) for systemically important banks (SIBs). The proposed legislative changes aim to

establish the PLB as part of ordinary law in order to enable the Swiss government and the Swiss National Bank (the

SNB) to support an SIB domiciled in Switzerland with liquidity in the process of resolution, in line with other financial

centers. The introduction of the PLB is intended to increase the confidence of market participants in the ability of

SIBs to be successfully recapitalized and remain solvent in a crisis. Furthermore, the draft legislation provides that

SIBs will pay the Swiss Confederation an annual fee to mitigate a potential impact on competition and to

compensate the Swiss Confederation for its guarantee to the SNB of the PLB, if required. 

In addition to the PLB, the proposed legislative changes would enact into ordinary law additional provisions

contained in the emergency ordinance of March 2023, including mandated clawback of variable compensation in

the event that government support is provided to an SIB.

In a next step, the Swiss Parliament will assess the proposed legislation, and if adopted, legislative changes are

expected to come into force by January 2025, at the earliest.

Findings of the group of experts on banking stability

In September 2023, a group of experts on banking stability, mandated by the Swiss Federal Department of Finance,

published a report considering the role of banks and the legal and regulatory framework related to the stability of

the Swiss financial center. The report concludes that the Swiss capital regulation is working as intended and that

there is no need for a major revision. However, the report sees a need for reforms with regard to banking supervision

and proposes that the relevant authorities be granted broader powers. Furthermore, the report suggests

improvements regarding liquidity regulations, including a proposal to extend the supply of liquidity in the case of a

crisis. The report also suggests that Swiss authorities should make improvements with regard to crisis preparation

and management. The Swiss Federal Council will consider the findings of the group of experts in its too-big-to-fail

(TBTF) review report to be presented by April 2024. 

UBS AG third quarter 2023 report |

UBS AG | Recent developments 5

Revisions to the Swiss Liquidity Ordinance

In the third quarter of 2023, the Swiss Financial Market Supervisory Authority (FINMA) communicated the liquidity

requirements arising from the revisions to the Swiss Liquidity Ordinance, with the aim of strengthening the resilience

of SIBs in Switzerland. The impacted legal entities of the UBS Group expect to be compliant with these requirements

when they become effective on 1 January 2024.

Swiss Federal Council consultation to strengthen the Swiss anti-money-laundering framework

In August 2023, the Swiss Federal Council launched a consultation on a bill to strengthen the Swiss anti-money-

laundering framework, with the aim of reinforcing the integrity and competitiveness of Switzerland as a financial

and business location. The measures aim to comply with the international standards of the Financial Action Task

Force (the FATF). Among other matters, key elements of the proposal include the introduction of a non-public

register managed by the Federal Department of Justice and Police containing information about the beneficial

owners of companies and other legal entities in Switzerland, as well as due diligence requirements for activities

with an increased risk of money laundering. The consultation ends in November 2023, and we expect to implement

operational controls if the bill is implemented as proposed.

US banking regulators’ changes to the resolution framework and long-term debt requirements

In August 2023, the Federal Reserve Board and the Federal Deposit Insurance Corporation issued joint proposals

on long-term debt requirements and resolution planning guidance for large banks. The long-term debt proposal

would require certain large bank-holding companies, intermediate holding companies and insured depositories with

USD 100bn or more in total assets to maintain a minimum amount of long-term debt, intended to enhance the

resilience and resolvability of such organizations. Large banking organizations would also be prohibited from certain

activities that could complicate the resolution or would lead to contagion risks. If the proposals are implemented,

UBS Bank USA would be subject to the long-term debt requirement, which would be incremental to the

requirements already imposed upon its parent organization, UBS Americas Holding LLC. The resolution planning

guidance proposed by US banking regulators would cover our US-based entities and calls for certain enhancements

in the requirements of the submitted resolution plans.

Disclosures on cybersecurity incidents and cybersecurity risk management, strategy and governance

In September 2023, the new rules from the SEC to enhance and standardize disclosure requirements related to

cybersecurity incidents and cybersecurity risk management, strategy and governance became effective. Among

other changes, the rules require foreign private issuers, including UBS AG, to annually report material information

regarding their cybersecurity risk management, strategy and governance on Form 20-F. The Form 20-F disclosures

will become applicable with annual reports for fiscal years ending on or after 15 December 2023.

Other developments

Sale of UBS Hana Asset Management Co., Ltd. in the fourth quarter of 2023

In October 2023, UBS AG completed the sale of its 51% stake in UBS Hana Asset Management Co., Ltd. to Hana

Securities. UBS AG expects to record a pre-tax gain on sale of approximately USD 20m (net of a foreign currency

translation loss) in Asset Management in the fourth quarter of 2023.

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 6

UBS AG consolidated performance

Income statement

For the quarter ended

% change from

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Net interest income

 984

 1,305

 1,565

 (25)

 (37)

 3,678

 4,946

Other net income from financial instruments measured at fair value through profit or loss

 2,467

 2,337

 1,792

 6

 38

 7,476

 5,637

Net fee and commission income

 4,666

 4,589

 4,495

 2

 4

 13,883

 14,664

Other income

 231

 237

 456

 (2)

 (49)

 624

 1,591

Total revenues

 8,348

 8,468

 8,308

 (1)

 0

 25,661

 26,838

Credit loss expense / (release)

 27

 16

 (3)

 70

 80

 22

Personnel expenses

 3,951

 3,847

 3,617

 3

 9

 11,697

 11,613

General and administrative expenses

 2,585

 2,443

 2,077

 6

 24

 8,011

 6,674

Depreciation, amortization and impairment of non-financial assets

 510

 707

 458

 (28)

 11

 1,686

 1,358

Operating expenses

 7,047

 6,997

 6,152

 1

 15

 21,393

 19,644

Operating profit / (loss) before tax

 1,275

 1,456

 2,159

 (12)

 (41)

 4,188

 7,171

Tax expense / (benefit) 

 339

 332

 551

 2

 (38)

 1,115

 1,577

Net profit / (loss)

 936

 1,124

 1,608

 (17)

 (42)

 3,072

 5,594

Net profit / (loss) attributable to non-controlling interests

 5

 4

 9

 11

 (50)

 17

 28

Net profit / (loss) attributable to shareholders

 932

 1,120

 1,598

 (17)

 (42)

 3,055

 5,566

Comprehensive income

Total comprehensive income

 (93)

 539

 (145)

 (36)

 2,251

 699

Total comprehensive income attributable to non-controlling interests

 (6)

 1

 (8)

 (18)

 8

 1

Total comprehensive income attributable to shareholders

 (86)

 538

 (137)

 (37)

 2,243

 698

Results: 3Q23 vs 3Q22

Operating profit before tax decreased by USD 884m, or 41%, to USD 1,275m, reflecting an increase in operating

expenses, partly offset by an increase in total revenues. Operating expenses, which in the third quarter of 2023

included USD 421m of integration-related expenses, increased by USD 895m, or 15%, to USD 7,047m. This was

mainly due to increases of USD 508m and USD 334m, respectively, in general and administrative expenses and

personnel expenses. Total revenues increased by USD 40m to USD 8,348m. Net fee and commission income

increased by USD 171m and combined net interest income and other net income from financial instruments

measured at fair value through profit or loss increased by USD 94m. These increases were partly offset by a

USD 225m decrease in other income. Net credit loss expenses were USD 27m, compared with net credit loss releases

of USD 3m in the prior-year quarter.

Integration-related expenses primarily included higher real estate costs and higher consulting fees in general and

administrative expenses, as well as higher personnel expenses, which were mainly due to salaries, related to the

integration of Credit Suisse.

Integration-related expenses are defined as expenses that are temporary, incremental and directly related to the

integration of Credit Suisse. They generally include costs of internal staff and contractors substantially dedicated to

integration activities, redundancy costs, incremental expenses from the shortening of useful lives of property,

equipment and software, and impairment charges relating to these assets. Classification as integration-related

expenses does not affect the timing of recognition and measurement of those expenses or the presentation in the

income statement.

Total revenues: 3Q23 vs 3Q22

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 94m to USD 3,451m, mainly driven by Personal & Corporate Banking, partly offset

by the Investment Bank.

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 7

Personal & Corporate Banking increased by USD 300m to USD 929m, largely due to higher net interest income,

mainly driven by higher deposit margins, which resulted from rising interest rates, and higher loan revenues, partly

offset by lower deposit fees. The prior-year quarter also included a benefit from the Swiss National Bank (SNB)

deposit exemption.

The Investment Bank decreased by USD 218m to USD 1,142m. Derivatives & Solutions decreased by USD 301m,

driven by Foreign Exchange, Rates and Equity Derivatives, due to lower levels of both volatility and client activity.

This was partly offset by an USD 82m increase in Global Banking, mainly reflecting an improvement in mark-to-

market and from higher revenues in Public Capital Markets.

›

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

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Net interest income from financial instruments measured at amortized cost and fair value

through other comprehensive income

 617

 876

 1,287

 (30)

 (52)

 2,454

 3,901

Net interest income from financial instruments measured at fair value through profit or

loss and other

 368

 430

 278

 (14)

 32

 1,224

 1,045

Other net income from financial instruments measured at fair value through profit or loss

 2,467

 2,337

 1,792

 6

 38

 7,476

 5,637

Total

 3,451

 3,642

 3,357

 (5)

 3

 11,154

 10,583

Global Wealth Management

 1,594

 1,721

 1,634

 (7)

 (2)

 5,118

 4,626

of which: net interest income

 1,300

 1,443

 1,366

 (10)

 (5)

 4,235

 3,775

of which: transaction-based income from foreign exchange and other intermediary

activity

 1

 294

 278

 268

 6

 10

 883

 851

Personal & Corporate Banking 

 929

 952

 629

 (2)

 48

 2,715

 1,936

of which: net interest income 

 799

 823

 502

 (3)

 59

 2,327

 1,559

of which: transaction-based income from foreign exchange and other intermediary

activity

 1

 130

 128

 127

 2

 3

 387

 377

Asset Management

 (14)

 (9)

 (3)

 65

 382

 (29)

 (14)

Investment Bank

2

 1,142

 1,209

 1,360

 (6)

 (16)

 4,007

 4,731

Global Banking

 92

 56

 10

 65

 852

 220

 156

Global Markets

 1,050

 1,154

 1,350

 (9)

 (22)

 3,787

 4,575

Non-core and Legacy

3

 32

 26

 5

 22

 559

 76

 105

Group Items

3

 (231)

 (257)

 (267)

 (10)

 (13)

 (733)

 (802)

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. 3 Starting with

the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed Group Items. Prior periods have been revised to reflect these changes.

Net fee and commission income

Net fee and commission income increased by USD 171m to USD 4,666m.

Portfolio management and related services and investment fund fees increased by USD 145m and USD 20m,

respectively, driven by Global Wealth Management and Asset Management, mainly reflecting higher invested assets

resulting from positive market performance.

Underwriting fees decreased by USD 45m to USD 143m, mainly driven by Global Banking in the Investment Bank,

reflecting lower equity underwriting revenues, partly offset by higher debt underwriting revenues.

›

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 231m, compared with USD 456m in the prior-year quarter. The decrease was largely due

to the prior-year quarter including gains in Global Wealth Management of USD 133m and USD 86m, respectively,

on the sales of our domestic wealth management business in Spain and our wholly owned subsidiary UBS Swiss

Financial Advisers AG, as well as a USD 70m gain related to a legacy litigation settlement. This was partially offset

by USD 36m higher income from associates and joint ventures, largely attributable to a gain that resulted from a

change to the equity method measurement basis for our investment in SIX Group. Furthermore, in the third quarter

of 2023, there was a USD 29m increase in shared services costs charged to other subsidiaries of UBS Group AG,

mainly related to acquisition-related costs.

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 8

Credit loss expense / release: 3Q23 vs 3Q22

Total net credit loss expenses were USD 27m, compared with net credit loss releases of USD 3m in the prior-year

quarter, reflecting net credit loss expenses of USD 20m related to stage 1 and 2 positions and USD 6m 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 m

Global 

Wealth 

Management

Personal & 

Corporate 

Banking

Asset

Management

Investment 

Bank

Non-core and

Legacy

1

Group 

Items

1

Total

For the quarter ended 30.9.23

Stages 1 and 2

 (7)

 16

 0

 10

 0

 1

 20

Stage 3

 15

 (15)

 0

 7

 (1)

 0

 6

Total credit loss expense / (release)

 8

 1

 0

 17

 (1)

 1

 27

For the quarter ended 30.6.23

Stages 1 and 2

 (4)

 (11)

 0

 5

 0

 0

 (10)

Stage 3

 9

 21

 0

 (4)

 0

 0

 26

Total credit loss expense / (release)

 5

 10

 0

 1

 0

 0

 16

For the quarter ended 30.9.22

Stages 1 and 2

 6

 (6)

 0

 4

 0

 0

 4

Stage 3

 1

 (9)

 0

 1

 0

 0

 (7)

Total credit loss expense / (release)

 7

 (15)

 0

 4

 0

 0

 (3)

1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed Group Items. Prior periods have been revised to reflect these changes.

Operating expenses: 3Q23 vs 3Q22

Operating expenses

For the quarter ended

% change from

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Personnel expenses 

 3,951

 3,847

 3,617

 3

 9

 11,697

 11,613

of which: salaries and variable compensation

 3,431

 3,364

 3,151

 2

 9

 10,151

 10,151

of which: variable compensation – financial advisors

 1

 1,150

 1,110

 1,093

 4

 5

 3,372

 3,436

General and administrative expenses 

 2,585

 2,443

 2,077

 6

 24

 8,011

 6,674

of which: net expenses for litigation, regulatory and similar matters

 8

 55

 21

 (85)

 (60)

 784

 298

of which: other general and administrative expenses

 2,577

 2,387

 2,057

 8

 25

 7,227

 6,376

Depreciation, amortization and impairment of non-financial assets

 510

 707

 458

 (28)

 11

 1,686

 1,358

Total operating expenses

 7,047

 6,997

 6,152

 1

 15

 21,393

 19,644

1 Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. It also includes expenses related to compensation commitments with financial

advisors entered into at the time of recruitment that are subject to vesting requirements.

Personnel expenses

Personnel expenses increased by USD 334m to USD 3,951m. Salaries and variable compensation increased by

USD 280m, mainly due to salary adjustments, higher variable compensation, foreign currency effects, and USD 53m

of integration-related expenses in connection with the acquisition of the Credit Suisse Group, as well as a USD 57m

increase in financial advisor compensation, reflecting 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 508m to USD 2,585m, mostly driven by integration-related

expenses of USD 328m, largely reflected in higher shared services costs charged by other subsidiaries of UBS

Group AG, higher real estate costs and higher consulting fees.

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 9

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 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this

report for more information about litigation, regulatory and similar matters

›

Refer to the “Regulatory and legal developments” and “Risk factors” sections of the Annual Report 2022 for more

information about litigation, regulatory and similar matters on a UBS Group AG consolidated basis

Depreciation, amortization and impairment of non-financial assets

Depreciation, amortization and impairment of non-financial assets increased by USD 52m to USD 510m, mainly

driven by higher depreciation of internally developed software, reflecting a higher level of capitalized costs, as well

as higher costs in respect of leasehold improvements, primarily related to integration-related expenses.

Tax: 3Q23 vs 3Q22

Income tax expenses were USD 339m for the third quarter of 2023, representing an effective tax rate of 26.6%,

compared with USD 551m and an effective tax rate of 25.5% for the prior-year quarter. Current tax expenses were

USD 484m, compared with USD 347m, and related to the taxable profits of UBS Switzerland AG and other entities.

There was a net deferred tax benefit of USD 145m, compared with an expense of USD 204m in the prior-year

quarter. This included a benefit of USD 133m that resulted from the recognition of deferred tax assets (DTAs) for

tax credits carried forward in relation to US corporate alternative minimum tax and a benefit of USD 89m in respect

of 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 quarter. These benefits were partly offset by an expense of USD 75m that

primarily related to the amortization of DTAs 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 DTAs in connection with the business planning process

or that result from any material jurisdictional statutory tax rate changes that could be enacted, a tax rate for the

fourth quarter of 2023 of around 23% is expected for UBS AG and its consolidated subsidiaries.

Total comprehensive income attributable to shareholders

In the third quarter of 2023, total comprehensive income attributable to shareholders was negative USD 86m,

reflecting net profit of USD 932m and other comprehensive income (OCI), net of tax, of negative USD 1,018m.

OCI related to cash flow hedges was negative USD 372m, mainly reflecting net unrealized losses on US dollar

hedging derivatives resulting from increases in the relevant US dollar long-term interest rates.

Foreign currency translation OCI was negative USD 348m, mainly resulting from a weakening of the Swiss franc

and the euro against the US dollar. 

OCI related to own credit on financial liabilities designated at fair value was negative USD 284m, primarily due to

a tightening of UBS’s own credit spreads.

›

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

more information

›

Refer to “Reconciliation of IFRS equity to Swiss SRB common equity tier 1 capital” in the “Capital management”

section of this report for more information about the effects of OCI on common equity tier 1 (CET1) capital

›

Refer to “Note 20 Fair value measurement” in the “UBS AG consolidated financial statements” section of the

Annual Report 2022 for more information about own credit on financial liabilities designated at fair value 

›

Refer to “Note 26 Post-employment benefit plans” in the “UBS AG consolidated financial statements” section of the

Annual Report 2022 for more information about OCI related to defined benefit plans

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 10

Sensitivity to interest rate movements

As of 30 September 2023, 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 of approximately USD 1.0bn in Global Wealth Management and

Personal & Corporate Banking in the first year after such a shift. Of this increase, approximately USD 0.6bn,

USD 0.2bn 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 decrease in annual net interest income

of approximately USD 0.9bn in Global Wealth Management and Personal & Corporate Banking in the first year

after such a shift, showing similar currency contributions as for the aforementioned increase in rates.

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 30 September 2023 applied to Global Wealth Management

and Personal & Corporate Banking. These estimates further assume no change to balance sheet size and structure,

stable foreign exchange rates, and no specific management action. These estimates do not represent a forecast of

net interest income variability. 

›

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 is 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: 3Q23 vs 3Q22

The cost / income ratio was 84.4%, compared with 74.0%, mainly reflecting a decrease in total revenues and an

increase in operating expenses. 

Personnel: 3Q23 vs 2Q23

The number of personnel employed as of 30 September 2023 increased by 126 to 48,015 (full-time equivalents).

Equity, CET1 capital and returns

As of or for the quarter ended

Year-to-date

USD m, except where indicated

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Net profit

Net profit attributable to shareholders

 932

 1,120

 1,598

 3,055

 5,566

Equity 

Equity attributable to shareholders

 52,836

 52,922

 54,610

 52,836

 54,610

Less: goodwill and intangible assets

 6,240

 6,281

 6,210

 6,240

 6,210

Tangible equity attributable to shareholders

 46,596

 46,640

 48,400

 46,596

 48,400

Less: other CET1 deductions

 3,218

 3,341

 6,336

 3,218

 6,336

CET1 capital

 43,378

 43,300

 42,064

 43,378

 42,064

Returns

Return on equity (%)

 7.0

 8.0

 11.7

 7.4

 13.2

Return on tangible equity (%)

 8.0

 9.1

 13.2

 8.3

 14.8

Return on CET1 capital (%)

 8.6

 10.4

 15.2

 9.5

 17.7

Common equity tier 1 capital: 3Q23 vs 2Q23

During the third quarter of 2023, CET1 capital increased by USD 0.1bn to USD 43.4bn, mainly reflecting operating

profit before tax of USD 1.3bn, almost entirely offset by current tax expenses of USD 0.5bn, additional dividend

accruals of USD 0.5bn and negative effects from foreign currency translation of USD 0.4bn.

Return on common equity tier 1 capital: 3Q23 vs 3Q22

The annualized return on CET1 capital was 8.6%, compared with 15.2%, driven by lower net profit attributable to

shareholders and an increase in average CET1 capital.

Risk-weighted assets: 3Q23 vs 2Q23

Risk-weighted assets (RWA) decreased by USD 2.3bn to USD 321.1bn, reflecting decreases of USD 4.4bn from

model updates, as well as USD 3.1bn from currency effects, partly offset by an increase of USD 5.2bn from asset

size and other movements.

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 11

Common equity tier 1 capital ratio: 3Q23 vs 2Q23

The CET1 capital ratio increased to 13.5% from 13.4%, mainly reflecting the aforementioned decrease in RWA.

Leverage ratio denominator: 3Q23 vs 2Q23

The leverage ratio denominator (the LRD) decreased by USD 6.2bn to USD 1,042.1bn, driven by currency effects of

USD 14.4bn, partly offset by asset size and other movements of USD 8.2bn.

Common equity tier 1 leverage ratio: 3Q23 vs 2Q23

The CET1 leverage ratio increased to 4.2% from 4.1%, largely due to the decrease in the LRD.

Going concern leverage ratio: 3Q23 vs 2Q23 

The going concern leverage ratio increased to 5.3% from 5.2%, mainly due to the aforementioned decrease in the

LRD.

Results 9M23 vs 9M22

Operating profit before tax decreased by USD 2,983m, or 42%, to USD 4,188m.

Total revenues decreased by USD 1,177m, or 4%, to USD 25,661m. Other income decreased by USD 967m, largely

due to the prior-year period including an USD 848m gain in Asset Management from the sale of a joint venture.

Net fee and commission income decreased by USD 781m, largely due to lower investment fund fees and fees from

portfolio management and related services, in Global Wealth Management and Asset Management, mainly

reflecting negative market performance. Net brokerage fees decreased, due to lower levels of client activity in the

Investment Bank and Global Wealth Management. Underwriting fees, mainly those relating to equity, as well as

M&A and corporate finance fees, decreased due to lower related revenues in Global Banking in the Investment

Bank. These decreases were partly offset by total combined net interest income and other net income from financial

instruments measured at fair value through profit or loss increasing by USD 571m, mainly due to increases in

Personal & Corporate Banking, primarily reflecting the impact of higher interest rates on deposit revenues, and

higher loan revenues, partly offset by lower deposit fees and the prior-year period including benefits from the SNB

deposit exemption. In addition, revenues were higher in Global Wealth Management, reflecting an increase in

deposit margins, driven by higher rates. These increases were partly offset by a decrease in the Investment Bank,

due to lower levels of both volatility and client activity, predominantly in Derivatives & Solutions. This decrease was

partly offset by an increase in Financing, driven by increases across all products. 

Expected credit loss expenses were USD 80m, compared with expenses of USD 22m in the prior-year period.

Operating expenses increased by USD 1,749m, or 9%, to USD 21,393m. General and administrative expenses

increased by USD 1,337m, mainly due to a USD 486m increase in expenses for litigation, regulatory and similar

matters, driven by a USD 665m increase in provisions recognized in the first quarter of 2023 related to the US

residential mortgage-backed securities litigation matter. In addition, there were increases in shared services costs

charged by other subsidiaries of UBS Group AG of USD 432m, real estate costs of USD 94m and consulting fees of

USD 69m, all mainly reflecting integration-related expenses. Depreciation, amortization and impairment of non-

financial assets increased by USD 328m, primarily relating to a USD 214m impairment of software projects in

progress resulting from a reprioritization of software development activity in the context of the integration of Credit

Suisse. Depreciation of internally developed software also increased, reflecting a higher level of capitalized costs. In

addition, there was an USD 84m increase in personnel expenses, largely driven by higher salaries, mainly reflecting

salary adjustments and integration-related expenses, partly offset by lower variable compensation, including lower

financial advisor compensation, attributable to lower compensable revenues.

UBS AG third quarter 2023 report |

UBS AG | UBS AG consolidated performance 12

Outlook

Central banks have paused interest rate increases, but uncertainties remain in terms of the appropriate level of

interest rates that will allow inflation to converge to their targets. As a result, the outlook for economic growth,

asset valuations and market volatility remains difficult to predict. In addition, the ongoing geopolitical tensions

including the conflicts in the Middle East and Ukraine continue to cloud the macroeconomic outlook.

This, in addition to normal seasonality, may affect wealth management and institutional clients’ transactional activity

in the fourth quarter of 2023. We also expect clients to continue to shift cash holdings from deposits into higher-

yielding products, resulting in similar sequential net interest income performance.

As we continue to execute on our strategy, growth and integration plans, our focus remains on offsetting some of

these ongoing challenges by helping clients to manage the inherent risks and opportunities, gaining share of wallet

and actively winding down our non-core assets and costs.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Global Wealth Management 13

Business divisions and Group

Items

Management report

Starting with the third quarter of 2023, Group Functions has been renamed Group Items. The Non-core and Legacy

Portfolio, which was previously reported within Group Functions, is now included in the new reportable segment

Non-core and Legacy. Prior periods have been revised to reflect these presentational changes.

Additionally, a small amount of exposure of pre-integration UBS business divisions was included in Non-core and

Legacy, starting with the third quarter of 2023, as such exposure was assessed as not strategic in light of the

acquisition of the Credit Suisse Group.

Global Wealth Management

Global Wealth Management

1

As of or for the quarter ended

% change from

Year-to-date

USD m, except where indicated

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Net interest income

 1,300

 1,443

 1,366

 (10)

 (5)

 4,235

 3,775

Recurring net fee income

2

 2,601

 2,535

 2,464

 3

 6

 7,590

 7,883

Transaction-based income

2

 765

 749

 732

 2

 5

 2,356

 2,480

Other income

 15

 10

 224

 51

 (93)

 29

 224

Total revenues

 4,682

 4,736

 4,786

 (1)

 (2)

 14,210

 14,363

Credit loss expense / (release)

 8

 5

 7

 76

 13

 29

 (3)

Operating expenses

 3,668

 3,627

 3,344

 1

 10

 10,872

 10,518

Business division operating profit / (loss) before tax

 1,006

 1,104

 1,434

 (9)

 (30)

 3,309

 3,847

Performance measures and other information

Pre-tax profit growth (year-on-year, %)

2

 (29.9)

 (2.3)

 (4.4)

 (14.0)

 (7.6)

Cost / income ratio (%)

2

 78.3

 76.6

 69.9

 76.5

 73.2

Financial advisor compensation

3

 1,150

 1,110

 1,093

 4

 5

 3,372

 3,436

Invested assets (USD bn)

2

 2,986

 3,037

 2,655

 (2)

 12

 2,986

 2,655

Loans, gross (USD bn)

4

 215.4

 220.4

 221.7

 (2)

 (3)

 215.4

 221.7

Customer deposits (USD bn)

4

 339.3

 336.1

 336.0

 1

 1

 339.3

 336.0

Impaired loan portfolio as a percentage of total loan portfolio, gross (%)

2,5

 0.3

 0.3

 0.2

 0.3

 0.2

Advisors (full-time equivalents)

 8,916

 8,992

 9,230

 (1)

 (3)

 8,916

 9,230

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 Relates to licensed professionals with the ability to provide investment

advice to clients in the Americas. Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. It 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 1,764m as of 30 September 2023. 

4 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. 5 Refer to the “Risk management

and control” section of this report for more information about (credit-)impaired exposures. Excludes loans to financial advisors.

Results: 3Q23 vs 3Q22

Profit before tax decreased by USD 428m, or 30%, to USD 1,006m, driven by higher operating expenses and lower

total revenues.

Total revenues

Total revenues decreased by USD 104m, or 2%, to USD 4,682m, reflecting lower other income and net interest

income, partly offset by higher recurring net fee and transaction-based income.

Net interest income decreased by USD 66m, or 5%, to USD 1,300m, mainly driven by lower loan revenues,

reflecting lower average loan volumes and margins, and due to shifts to lower-margin deposit products, partly

offset by the effect of higher deposit margins, resulting from rising interest rates.

Recurring net fee income increased by USD 137m, or 6%, to USD 2,601m, mainly reflecting positive market

performance.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Global Wealth Management 14

Transaction-based income increased by USD 33m, or 5%, to USD 765m, mainly driven by higher levels of client

activity, particularly in Asia Pacific, Switzerland and EMEA.

Other income decreased by USD 209m, or 93%, to USD 15m, as the third quarter of 2022 included a USD 133m

gain from the sale of our domestic wealth management business in Spain and an USD 86m gain from the sale of

UBS Swiss Financial Advisers AG.

Credit loss expense / release

Net credit loss expenses were USD 8m, primarily related to stage 3 positions, compared with net expenses of

USD 7m in the third quarter of 2022.

Operating expenses

Operating expenses increased by USD 324m, or 10%, to USD 3,668m, mainly driven by integration-related

expenses associated with the acquisition of the Credit Suisse Group, unfavorable foreign currency effects, higher

financial advisor variable compensation and an increase in technology expenses.

Invested assets: 3Q23 vs 2Q23

Invested assets decreased by USD 51bn, or 2%, to USD 2,986bn, mainly driven by negative market performance of

USD 49bn and unfavorable foreign currency effects of USD 19bn, partly offset by net new money inflows.

Loans: 3Q23 vs 2Q23

Loans decreased by USD 5.0bn to USD 215.4bn, mainly driven by negative net new loans of USD 2.8bn, as well as

unfavorable foreign currency effects.

Customer deposits: 3Q23 vs 2Q23

Customer deposits increased by USD 3.2bn to USD 339.3bn, mainly driven by net inflows into fixed-term and

savings deposit products, partly offset by continued shifts into money market funds and US-government securities,

as well as unfavorable foreign currency effects.

Results: 9M23 vs 9M22

Profit before tax decreased by USD 538m, or 14%, to USD 3,309m, mainly driven by higher operating expenses

and lower total revenues.

Total revenues decreased by USD 153m, or 1%, to USD 14,210m, with decreases in recurring net fee, other income

and transaction-based income partly offset by increases in net interest income.

Net interest income increased by USD 460m, or 12%, to USD 4,235m, mainly driven by higher deposit margins,

resulting from rising interest rates, partly offset by the effects of shifts to lower-margin deposit products, lower

average deposit volumes, and lower loan revenues, reflecting lower average volumes and margins.

Recurring net fee income decreased by USD 293m, or 4%, to USD 7,590m, primarily driven by negative market

performance.

Transaction-based income decreased by USD 124m, or 5%, to USD 2,356m, mainly driven by lower levels of client

activity, particularly in the Americas and Asia Pacific.

Other income decreased by USD 195m, or 87%, to USD 29m, as the first nine months of 2022 included a

USD 133m gain from the sale of our domestic wealth management business in Spain and an USD 86m gain from

the sale of UBS Swiss Financial Advisers AG.

Net credit loss expenses were USD 29m, primarily related to stage 3 positions, compared with net releases of

USD 3m in the first nine months of 2022.

Operating expenses increased by USD 354m, or 3%, to USD 10,872m, mostly driven by integration-related

expenses associated with the acquisition of the Credit Suisse Group, unfavorable foreign currency effects and higher

technology expenses. These were partly offset by lower provisions for litigation, regulatory and similar matters, as

well as lower financial advisor variable compensation.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Personal & Corporate Banking 15

Personal & Corporate Banking 

Personal & Corporate Banking – in Swiss francs

1

As of or for the quarter ended

% change from

Year-to-date

CHF m, except where indicated

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Net interest income

 711

 741

 489

 (4)

 46

 2,104

 1,484

Recurring net fee income

2

 215

 213

 206

 1

 4

 638

 618

Transaction-based income

2

 296

 305

 285

 (3)

 4

 910

 887

Other income

 40

 14

 20

 191

 100

 64

 33

Total revenues

 1,263

 1,273

 1,000

 (1)

 26

 3,716

 3,022

Credit loss expense / (release)

 2

 9

 (15)

 (82)

 25

 39

Operating expenses

 657

 643

 590

 2

 11

 1,915

 1,777

Business division operating profit / (loss) before tax

 604

 621

 425

 (3)

 42

 1,776

 1,206

Performance measures and other information

Pre-tax profit growth (year-on-year, %)

2

 42.0

 57.8

 (3.2)

 47.2

 (3.6)

Cost / income ratio (%)

2

 52.1

 50.5

 59.0

 51.5

 58.8

Net interest margin (bps)

2

 194

 204

 137

 193

 140

Fee and trading income for Corporate & Institutional Clients

2

 196

 228

 190

 (14)

 4

 655

 624

Investment products for Personal Banking (CHF bn)

2

 23.6

 23.6

 20.7

 0

 14

 23.6

 20.7

Net new investment products for Personal Banking (CHF bn)

2

 0.50

 0.55

 0.43

 1.91

 1.86

Active Digital Banking clients in Personal Banking (%)

2,3

 78.1

 77.5

 74.5

 77.6

 73.8

Active Mobile Banking clients in Personal Banking (%)

2

 65.6

 64.3

 57.9

 64.3

 55.0

Active Digital Banking clients in Corporate & Institutional Clients (%)

2

 80.9

 81.0

 79.6

 81.1

 79.8

Loans, gross (CHF bn)

 147.8

 145.8

 142.8

 1

 3

 147.8

 142.8

Customer deposits (CHF bn)

 168.7

 165.1

 163.4

 2

 3

 168.7

 163.4

Impaired loan portfolio as a percentage of total loan portfolio, gross (%)

2,4

 0.8

 0.8

 0.8

 0.8

 0.8

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 In the third quarter of 2023, 89.0% 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). 4 Refer to the “Risk management and control” section of this

report for more information about (credit-)impaired exposures.

Results

:

3Q23 vs 3Q22

Profit before tax increased by CHF 179m, or 42%, to CHF 604m, with higher total revenues partly offset by higher

operating expenses and net credit loss expenses, compared with net credit loss releases in the third quarter of 2022.

Total revenues

Total revenues increased by CHF 263m, or 26%, to CHF 1,263m, reflecting increases across all income lines,

predominantly in net interest income.

Net interest income increased by CHF 222m to CHF 711m, mainly driven by higher deposit margins, which resulted

from rising interest rates, and higher loan revenues, partly offset by lower deposit fees. The third quarter of 2022

included a benefit from the Swiss National Bank deposit exemption.

Recurring net fee income increased by CHF 9m to CHF 215m, mainly due to higher revenues related to custody

assets and mandates, reflecting higher average volumes of underlying assets.

Transaction-based income increased by CHF 11m to CHF 296m, mainly driven by higher income from Corporate &

Institutional Clients. 

Other income increased by CHF 20m to CHF 40m, mainly reflecting a one-time effect of CHF 23m that resulted

from a change to the equity method measurement basis for our investment in SIX Group.

Credit loss expense / release

Net credit loss expenses were CHF 2m, compared with net releases of CHF 15m in the third quarter of 2022.

Operating expenses

Operating expenses increased by CHF 67m, or 11%, to CHF 657m, mainly driven by integration-related expenses

associated with the acquisition of the Credit Suisse Group. 

UBS AG third quarter 2023 report |

Business divisions and Group Items | Personal & Corporate Banking 16

Results: 9M23 vs 9M22

Profit before tax increased by CHF 570m, or 47%, to CHF 1,776m, with higher total revenues and lower net credit

loss expenses, partly offset by higher operating expenses.

Total revenues increased by CHF 694m, or 23%, to CHF 3,716m, reflecting increases across all income lines,

predominantly in net interest income.

Net interest income increased by CHF 620m to CHF 2,104m, mainly driven by higher deposit margins, which

resulted from rising interest rates, and higher loan revenues, partly offset by lower deposit fees. The first nine

months of 2022 included a benefit from the Swiss National Bank deposit exemption.

Recurring net fee income increased by CHF 20m to CHF 638m, mainly reflecting higher revenues from account

fees.

Transaction-based income increased by CHF 23m to CHF 910m, mainly driven by higher income from Corporate &

Institutional Clients. 

Other income increased by CHF 31m to CHF 64m, mainly reflecting a one-time effect of CHF 23m that resulted

from a change to the equity method measurement basis for our investment in SIX Group.

Net credit loss expenses were CHF 25m, mainly related to model-driven credit loss expenses, compared with net

expenses of CHF 39m in the first nine months of 2022.

Total operating expenses increased by CHF 138m, or 8%, to CHF 1,915m, mainly driven by integration-related

expenses associated with the acquisition of the Credit Suisse Group, technology expenses, and accruals for variable

compensation.

Personal & Corporate Banking – in US dollars

1

As of or for the quarter ended

% change from

Year-to-date

USD m, except where indicated

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Net interest income

 799

 823

 502

 (3)

 59

 2,327

 1,559

Recurring net fee income

2

 241

 237

 212

 2

 14

 705

 649

Transaction-based income

2

 333

 339

 294

 (2)

 13

 1,007

 932

Other income

 45

 15

 21

 190

 115

 70

 34

Total revenues

 1,418

 1,414

 1,029

 0

 38

 4,110

 3,175

Credit loss expense / (release)

 1

 10

 (15)

 (89)

 27

 42

Operating expenses

 739

 714

 607

 3

 22

 2,118

 1,867

Business division operating profit / (loss) before tax

 678

 690

 437

 (2)

 55

 1,965

 1,266

Performance measures and other information

Pre-tax profit growth (year-on-year, %)

2

 55.2

 68.8

 (8.7)

 55.3

 (7.2)

Cost / income ratio (%)

2

 52.1

 50.5

 59.0

 51.5

 58.8

Net interest margin (bps)

2

 197

 206

 137

 195

 139

Fee and trading income for Corporate & Institutional Clients

2

 220

 254

 195

 (13)

 13

 724

 656

Investment products for Personal Banking (USD bn)

2

 25.7

 26.4

 21.0

 (2)

 22

 25.7

 21.0

Net new investment products for Personal Banking (USD bn)

2

 0.56

 0.61

 0.44

 2.10

 1.97

Active Digital Banking clients in Personal Banking (%)

2,3

 78.1

 77.5

 74.5

 77.6

 73.8

Active Mobile Banking clients in Personal Banking (%)

2

 65.6

 64.3

 57.9

 64.3

 55.0

Active Digital Banking clients in Corporate & Institutional Clients (%)

2

 80.9

 81.0

 79.6

 81.1

 79.8

Loans, gross (USD bn)

 161.3

 162.7

 144.7

 (1)

 11

 161.3

 144.7

Customer deposits (USD bn)

 184.1

 184.3

 165.6

 0

 11

 184.1

 165.6

Impaired loan portfolio as a percentage of total loan portfolio, gross (%)

2,4

 0.8

 0.8

 0.8

 0.8

 0.8

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 In the third quarter of 2023, 89.0% 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). 4 Refer to the “Risk management and control” section of this

report for more information about (credit-)impaired exposures.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Asset Management 17

Asset Management

Asset Management

1

As of or for the quarter ended

% change from

Year-to-date

USD m, except where indicated

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Net management fees

2

 499

 492

 502

 2

 (1)

 1,470

 1,578

Performance fees

 11

 7

 14

 53

 (20)

 42

 40

Net gain from disposal of a joint venture

 848

Total revenues

 511

 499

 516

 2

 (1)

 1,512

 2,466

Credit loss expense / (release)

 0

 0

 0

 (1)

 0

Operating expenses

 425

 410

 377

 4

 13

 1,243

 1,192

Business division operating profit / (loss) before tax

 86

 89

 139

 (4)

 (38)

 270

 1,274

Performance measures and other information

Pre-tax profit growth (year-on-year, %)

3

 (38.4)

 (90.7)

 (35.1)

 (78.9)

 83.3

Cost / income ratio (%)

3

 83.3

 82.1

 73.0

 82.2

 48.3

Gross margin on invested assets (bps)

3,4

 17

 17

 20

 18

 30

Information by business line / asset class

Invested assets (USD bn)

3

Equities

 494

 519

 411

 (5)

 20

 494

 411

Fixed Income

 324

 321

 271

 1

 20

 324

 271

of which: money market

 143

 136

 99

 5

 44

 143

 99

Multi-asset & Solutions

 164

 168

 149

 (2)

 10

 164

 149

Hedge Fund Businesses

 55

 55

 51

 (2)

 6

 55

 51

Real Estate & Private Markets

 98

 102

 97

 (4)

 0

 98

 97

Total invested assets excluding associates

 1,134

 1,165

 979

 (3)

 16

 1,134

 979

of which: passive strategies

 487

 508

 408

 (4)

 19

 487

 408

Associates

5

 23

 23

 25

 1

 (7)

 23

 25

Total invested assets

4

 1,157

 1,188

 1,004

 (3)

 15

 1,157

 1,004

Information by region

Invested assets (USD bn)

3

Americas

 333

 328

 271

 1

 23

 333

 271

Asia Pacific

4

 168

 173

 166

 (3)

 1

 168

 166

Europe, Middle East and Africa (excluding Switzerland)

 291

 303

 239

 (4)

 22

 291

 239

Switzerland

 366

 384

 328

 (5)

 12

 366

 328

Total invested assets

4

 1,157

 1,188

 1,004

 (3)

 15

 1,157

 1,004

Information by channel

Invested assets (USD bn)

3

Third-party institutional

 638

 656

 563

 (3)

 13

 638

 563

Third-party wholesale

 115

 124

 108

 (7)

 7

 115

 108

UBS’s wealth management businesses

 382

 386

 309

 (1)

 24

 382

 309

Associates

5

 23

 23

 25

 1

 (7)

 23

 25

Total invested assets

4

 1,157

 1,188

 1,004

 (3)

 15

 1,157

 1,004

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 Starting with the second

quarter of 2023, invested assets include invested assets from associates, to better reflect the business strategy. Comparative figures have been restated to reflect this change. 5 The invested assets amounts reported

for associates are prepared in accordance with their local regulatory requirements and practices. 

UBS AG third quarter 2023 report |

Business divisions and Group Items | Asset Management 18

Results: 3Q23 vs 3Q22

Profit before tax decreased by USD 53m, or 38%, to USD 86m, primarily reflecting higher operating expenses.

Total revenues

Total revenues were stable at USD 511m.

Net management fees decreased by USD 3m, or 1%, to USD 499m, reflecting negative interest income and the

impact of continued margin compression, almost entirely offset by positive market performance and foreign

currency effects.

Performance fees decreased by USD 3m to USD 11m, driven by decreases in Real Estate & Private Markets, partly

offset by increases in Hedge Fund Businesses.

Operating expenses

Operating expenses increased by USD 48m, or 13%, to USD 425m, mainly reflecting integration-related expenses,

adverse foreign currency effects, increases in technology and personnel expenses.

Invested assets: 3Q23 vs 2Q23 

Invested assets decreased by USD 31bn, or 3%, to USD 1,157bn, reflecting negative market performance of

USD 17bn, unfavorable foreign currency effects of USD 17bn, partly offset by net new money generation of

USD 6bn. Excluding money market flows, net new money (excluding associates) was negative USD 1bn.

Results: 9M23 vs 9M22

Profit before tax decreased by USD 1,004m, or 79%, to USD 270m, primarily due to the first nine months of 2022

including a gain of USD 848m from the sale of our shareholding in the Mitsubishi Corp.-UBS Realty Inc. joint

venture. Excluding that gain, profit before tax decreased by USD 157m, or 37%, mainly reflecting lower net

management fees and higher operating expenses.

Total revenues decreased by USD 954m, or 39%, to USD 1,512m. The decrease was primarily due to the first nine

months of 2022 including the aforementioned gain of USD 848m. Excluding that gain, total revenues decreased

by USD 107m, or 7%.

Net management fees decreased by USD 108m, or 7%, to USD 1,470m, mainly reflecting negative market

performance and the impact of continued margin compression.

Performance fees increased by USD 2m, or 4%, to USD 42m.

Operating expenses increased by USD 51m, or 4%, to USD 1,243m, mainly reflecting integration-related expenses,

adverse foreign currency effects, increases in technology expenses, partly offset by decreases in personnel expenses.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Investment Bank 19

Investment Bank

Investment Bank

1

As of or for the quarter ended

% change from

Year-to-date

USD m, except where indicated

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Advisory

 106

 160

 136

 (34)

 (22)

 437

 561

Capital Markets

 258

 210

 193

 23

 34

 681

 695

Global Banking

 364

 371

 329

 (2)

 11

 1,118

 1,256

Execution Services

 374

 358

 376

 5

 (1)

 1,154

 1,271

Derivatives & Solutions

 562

 629

 866

 (11)

 (35)

 2,194

 3,121

Financing

 468

 533

 460

 (12)

 2

 1,538

 1,384

Global Markets

 1,405

 1,520

 1,702

 (8)

 (17)

 4,887

 5,775

of which: Equities

 1,043

 1,133

 1,107

 (8)

 (6)

 3,480

 4,084

of which: Foreign Exchange, Rates and Credit

 362

 387

 595

 (7)

 (39)

 1,407

 1,692

Total revenues

 1,769

 1,891

 2,031

 (6)

 (13)

 6,004

 7,031

Credit loss expense / (release)

 17

 1

 4

 282

 25

 (20)

Operating expenses

 1,840

 1,757

 1,591

 5

 16

 5,480

 5,320

Business division operating profit / (loss) before tax

 (89)

 133

 436

 500

 1,731

Performance measures and other information

Pre-tax profit growth (year-on-year, %)

2

 (120.3)

 (65.7)

 (47.7)

 (71.1)

 (8.0)

Cost / income ratio (%)

2

 104.1

 92.9

 78.3

 91.3

 75.7

Average VaR (1-day, 95% confidence, 5 years of historical data)

 16

 12

 10

 37

 62

 13

 10

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.

Results: 3Q23 vs 3Q22

Loss before tax was USD 89m, mainly reflecting lower total revenues and higher operating expenses, compared

with profit before tax of USD 436m in the third quarter of 2022.

Total revenues

Total revenues decreased by USD 262m, or 13%, to USD 1,769m, reflecting lower revenues in Global Markets,

partly offset by an increase in Global Banking.

Global Banking

Global Banking revenues increased by USD 35m, or 11%, to USD 364m, driven by higher Capital Markets revenues,

partly offset by lower Advisory revenues. Fee-pool-comparable revenues

1

 decreased 15%, compared with a 19%

decrease in the overall global fee pool.

2

Advisory revenues decreased by USD 30m, or 22%, to USD 106m, mainly due to lower merger and acquisition

transaction revenues, which decreased by USD 37m, or 30%, compared with a 33% decrease in the relevant global

fee pool.

2

Capital Markets revenues increased by USD 65m, or 34%, to USD 258m, mainly due to higher Leveraged Capital

Markets revenues, with a USD 36m, or 76%, increase in fees, and prior-year mark-to-market losses of USD 28m

which did not recur. Leveraged Capital Markets outperformed the relevant global fee pool

2

 increase of 17%.

Global Markets

Global Markets revenues decreased by USD 297m, or 17%, to USD 1,405m, primarily driven by lower Derivatives

& Solutions revenues.

Execution Services revenues were stable at USD 374m.

Derivatives & Solutions revenues decreased by USD 304m, or 35%, to USD 562m, mostly driven by Foreign

Exchange, Rates and Equity Derivatives, due to lower levels of both volatility and client activity.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Investment Bank 20

Financing revenues increased by USD 8m, or 2%, to USD 468m, supported by increased client balances.

Equities

Global Markets Equities revenues decreased by USD 64m, or 6%, to USD 1,043m, mainly driven by a decrease in

Equity Derivatives revenues.

Foreign Exchange, Rates and Credit

Global Markets Foreign Exchange, Rates and Credit revenues decreased by USD 233m, or 39%, to USD 362m,

primarily driven by lower Foreign Exchange and Rates revenues.

Credit loss expense / release

Net credit loss expenses were USD 17m, compared with net expenses of USD 4m in the third quarter of 2022.

Operating expenses

Operating expenses increased by USD 249m, or 16%, to USD 1,840m, mainly driven by integration-related

expenses associated with the acquisition of the Credit Suisse Group, and by higher technology expenses.

Results: 9M23 vs 9M22

Profit before tax decreased by USD 1,231m, or 71%, to USD 500m, mainly reflecting lower total revenues and

higher operating expenses.

Total revenues decreased by USD 1,027m, or 15%, to USD 6,004m, reflecting lower revenues in Global Markets

and Global Banking.

Global Banking revenues decreased by USD 138m, or 11%, to USD 1,118m, reflecting lower Advisory and Capital

Markets revenues. Fee-pool-comparable revenues

1

 decreased 24%, compared with a 20% decrease in the overall

global fee pool.

2

Advisory revenues decreased by USD 124m, or 22%, to USD 437m, mostly due to lower merger and acquisition

transaction revenues, which decreased by USD 125m, or 25%, compared with a 32% decrease in the relevant

global fee pool.

2

Capital Markets revenues decreased by USD 14m, or 2%, to USD 681m.

Global Markets revenues decreased by USD 888m, or 15%, to USD 4,887m, driven by lower Derivatives & Solutions

and Execution Services revenues, partly offset by higher Financing revenues.

Execution Services revenues decreased by USD 117m, or 9%, to USD 1,154m, mainly driven by Cash Equities

revenues, due to lower exchange-traded volumes.

Derivatives & Solutions revenues decreased by USD 927m, or 30%, to USD 2,194m, mostly driven by decreases in

Equity Derivatives, Foreign Exchange and Rates, due to lower levels of both volatility and client activity.

Financing revenues increased by USD 154m, or 11%, to USD 1,538m, with increases across all products.

Global Markets Equities revenues decreased by USD 604m, or 15%, to USD 3,480m, mainly driven by Equity

Derivatives revenues.

Global Markets Foreign Exchange, Rates and Credit revenues decreased by USD 285m, or 17%, to USD 1,407m,

largely driven by Foreign Exchange and Rates.

Net credit loss expenses were USD 25m, compared with net releases of USD 20m in the first nine months of 2022.

Operating expenses increased by USD 160m, or 3%, to USD 5,480m, mainly driven by integration-related expenses

associated with the acquisition of the Credit Suisse Group.

1

 UBS fee-pool-comparable revenues consist of revenues from: merger-and-acquisition-related transactions; Equity Capital Markets, excluding derivatives; Leveraged Capital Markets, excluding the impact of mark-to-

market movements on loan portfolios; and Debt Capital Markets, excluding revenues related to debt underwriting of UBS instruments.

2

 Source: Dealogic, as of 29 September 2023.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Non-core and Legacy 21

Non-core and Legacy

Non-core and Legacy

1

As of or for the quarter ended

% change from

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Total revenues

 35

 28

 77

 25

 (54)

 87

 184

Credit loss expense / (release)

 (1)

 0

 0

 (1)

 2

Operating expenses

 142

 21

 25

 586

 479

 861

 84

Operating profit / (loss) before tax

 (106)

 8

 52

 (774)

 98

1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment, which includes Non-core and Legacy Portfolio previously reported within Group Functions. Prior periods have

been revised to reflect this presentational change. Additionally, a small amount of exposure of pre-integration UBS business divisions was included in Non-core and Legacy starting with the third quarter of 2023, as

it was assessed as not strategic in light of the acquisition of the Credit Suisse Group.

Results: 3Q23 vs 3Q22

Loss before tax was USD 106m, compared with a profit before tax of USD 52m.

Total revenues

Total revenues decreased by USD 42m, or 54%, to USD 35m, mainly due to the third quarter of 2022 including

income of USD 62m related to a legacy litigation settlement.

Operating expenses

Operating expenses increased by USD 117m to USD 142m, largely due to integration-related expenses of

USD 115m.

Results: 9M23 vs 9M22

Loss before tax was USD 774m, compared with a profit before tax of USD 98m.

Total revenues

Total revenues decreased by USD 97m, or 53%, to USD 87m, mainly due to the first nine months of 2022 including

income of USD 62m related to a legacy litigation settlement. In addition, valuation gains on our portfolio of auction

rate securities in the first nine months of 2023 were USD 54m lower than in the prior-year period.

Operating expenses

Operating expenses increased by USD 777m to USD 861m, largely reflecting an increase in provisions of USD 665m

related to the US residential mortgage-backed securities litigation matter and integration-related expenses of

USD 115m.

UBS AG third quarter 2023 report |

Business divisions and Group Items | Group Items 22

Group Items

Group Items

1

As of or for the quarter ended

% change from

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

2Q23

3Q22

30.9.23

30.9.22

Results

Total revenues

 (65)

 (100)

 (130)

 (35)

 (49)

 (262)

 (382)

Credit loss expense / (release)

 1

 0

 0

 1

 0

Operating expenses

 233

 469

 209

 (50)

 11

 819

 664

Operating profit / (loss) before tax

 (299)

 (569)

 (339)

 (47)

 (12)

 (1,082)

 (1,045)

1 Starting with the third quarter of 2023, Group Functions has been renamed Group Items, and Non-core and Legacy Portfolio, which was previously reported within Group Functions, was included in Non-core and

Legacy, which represents a separate reportable segment. Prior periods have been revised to reflect these presentational changes.

Results: 3Q23 vs 3Q22

Loss before tax was USD 299m, compared with a loss of USD 339m.

Income from accounting asymmetries, including hedge accounting ineffectiveness, was net negative USD 11m,

compared with net negative income of USD 177m. The impacts in the prior-year quarter were driven by mark-to-

market effects on portfolio-level economic hedges due to rising interest rates and cross-currency-basis movements.

Income related to centralized Group Treasury risk management was negative USD 6m, compared with positive

USD 17m.

In addition, the third quarter of 2023 included an increase of USD 61m in funding costs related to deferred tax

assets (DTAs).

Results: 9M23 vs 9M22

Loss before tax was USD 1,082m, compared with a loss of USD 1,045m.

This included income from accounting asymmetries, including hedge accounting ineffectiveness, of net negative

USD 136m, compared with net negative income of USD 562m. Income related to centralized Group Treasury risk

management was positive USD 19m, compared with negative USD 38m in the first nine months of 2022.

Furthermore, the first nine months of 2023 included integration-related expenses of USD 288m associated with the

acquisition of the Credit Suisse Group and an increase of USD 241m in funding costs related to DTAs, partly offset

by remeasurement losses of USD 46m on properties held for sale in the first nine months of 2022.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet 23

Risk, capital, liquidity and

funding, and balance sheet

Management report

Table of contents

24

24

26

27

28

30

31

34

35

37

37

37

37

38

38

38

38

39

40

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Risk management and control 24

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 the Annual Report 2022.

Credit risk 

Overall banking products exposure

Overall banking products exposure decreased by USD 6bn to USD 688bn as of 30 September 2023, driven by a

USD 11bn decrease in loans and advances to customers, partly offset by a USD 3bn increase in guarantees and loan

commitments and a USD 2bn increase in cash and balances at central banks.

Total net credit loss expenses were USD 27m, reflecting USD 20m net credit loss expenses related to stage 1 and 2

positions and USD 6m net credit loss expenses related to stage 3 positions.

In aggregate, exposure related to traded products increased by USD 8bn to USD 51bn during the third quarter of

2023, mainly driven by market movements and increased clearing activities.

›

Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet

movements

›

Refer to the “UBS AG consolidated performance” section and “Note 7 Expected credit loss measurement” in the

“Consolidated financial statements” section of this report for more information about credit loss expense / release

Loan underwriting

In the Investment Bank, mandated loan underwriting commitments on a notional basis increased by USD 0.9bn to

USD 2.8bn as of 30 September 2023, driven by new deals. USD 0.1bn of commitments had not yet been distributed

as originally planned as of 30 September 2023.

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.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Risk management and control 25

Banking and traded products exposure in the business divisions and Group Items

30.9.23

USD m

Global

Wealth

Management

Personal &

Corporate

Banking

Asset 

Management

Investment 

Bank

Non-core 

and Legacy

1

Group 

Items

1

Total

Banking products

2,3

Gross exposure

 307,528

 237,082

 1,432

 64,592

 3,744

 74,070

 688,448

of which: loans and advances to customers (on-balance sheet)

 210,209

 161,328

 (1)

 12,036

 197

 3,395

 387,164

of which: guarantees and loan commitments (off-balance sheet)

 11,108

 27,087

 0

 15,126

 1,733

 11,844

 66,898

Traded products

4,5

Gross exposure

 9,907

 528

 0

 40,089

 50,525

of which: over-the-counter derivatives

 7,648

 513

 0

 11,862

 20,023

of which: securities financing transactions

 0

 0

 0

 18,784

 18,784

of which: exchange-traded derivatives

 2,260

 16

 0

 9,444

 11,719

Other credit lines, gross

6

 11,656

 24,982

 0

 4,634

 0

 1,317

 42,589

Total credit-impaired exposure, gross

 884

 1,481

 0

 347

 12

 0

 2,724

Total allowances and provisions for expected credit losses

 229

 717

 0

 186

 5

 6

 1,142

of which: stage 1

 73

 163

 0

 55

 0

 6

 297

of which: stage 2

 55

 154

 0

 55

 0

 0

 265

of which: stage 3

 101

 400

 0

 76

 5

 0

 581

30.6.23

USD m

Global

Wealth

Management

Personal &

Corporate

Banking

Asset 

Management

Investment 

Bank

Non-core 

and Legacy

1

Group

Items

1

Total

Banking products

3

Gross exposure

 322,668

 241,501

 1,361

 63,117

 677

 65,146

 694,470

of which: loans and advances to customers (on-balance sheet)

 214,887

 162,721

 (1)

 12,750

 8

 8,090

 398,455

of which: guarantees and loan commitments (off-balance sheet)

 13,861

 27,296

 0

 13,361

 3

 9,022

 63,543

Traded products

4,5

Gross exposure

 8,668

 345

 0

 33,041

 42,054

of which: over-the-counter derivatives

 6,666

 330

 0

 9,061

 16,057

of which: securities financing transactions

 0

 0

 0

 16,536

 16,536

of which: exchange-traded derivatives

 2,002

 15

 0

 7,444

 9,460

Other credit lines, gross

6

 12,813

 25,002

 0

 5,357

 0

 1,544

 44,716

Total credit-impaired exposure, gross

 781

 1,549

 0

 324

 6

 0

 2,660

Total allowances and provisions for expected credit losses

 225

 734

 0

 170

 3

 5

 1,136

of which: stage 1

 86

 163

 0

 53

 0

 5

 307

of which: stage 2

 51

 145

 0

 48

 0

 0

 244

of which: stage 3

 88

 426

 0

 69

 3

 0

 585

1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed Group Items. Prior periods have been revised to reflect these changes. 

2 In the third quarter of 2023, a small amount of exposure of pre-integration UBS business divisions was included in Non-core and Legacy, as it was assessed as not strategic in light of the acquisition of the Credit

Suisse Group. 3 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 fair value through other comprehensive income, irrevocable committed prolongation of existing loans and unconditionally revocable committed credit lines, and forward starting reverse repurchase

and securities borrowing agreements. 4 Internal management view of credit risk, which differs in certain respects from IFRS. 5 As counterparty risk for traded products is managed at counterparty level, no further

split between exposures in the Investment Bank, Non-core and Legacy and Group Items is provided. 6 Unconditionally revocable committed credit lines. 

Collateralization of Loans and advances to customers

1

Global Wealth Management

Personal & Corporate Banking

USD m, except where indicated

30.9.23

30.6.23

30.9.23

30.6.23

Secured by collateral

 207,489

 212,280

 144,491

 145,375

Residential real estate

 64,066

 64,178

 115,600

 116,429

Commercial / industrial real estate

 4,956

 4,990

 20,979

 21,291

Cash

 23,794

 25,884

 2,906

 3,046

Equity and debt instruments

 97,242

 101,435

 2,168

 2,191

Other collateral

 17,431

 15,792

 2,838

 2,418

Subject to guarantees

 77

 103

 2,568

 2,669

Uncollateralized and not subject to guarantees

 2,643

 2,504

 14,269

 14,677

Total loans and advances to customers, gross

 210,209

 214,887

 161,328

 162,721

Allowances

 (154)

 (154)

 (582)

 (601)

Total loans and advances to customers, net of allowances

 210,056

 214,733

 160,746

 162,120

Collateralized loans and advances to customers in % of total loans and advances to customers, gross (%)

 98.7

 98.8

 89.6

 89.3

1 Collateral arrangements generally incorporate a range of collateral, including cash, securities, real estate and other collateral. UBS AG applies a risk-based approach that generally prioritizes collateral according to

its liquidity profile.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Risk management and control 26

Market risk

UBS AG consolidated continued to maintain generally low levels of management value-at-risk (VaR). Average

management VaR (1-day, 95% confidence level) increased from USD 13m to USD 17m at the end of the third

quarter of 2023 driven by Global Markets in the Investment Bank.

There were no new VaR negative backtesting exceptions in the third quarter of 2023. The number of negative

backtesting exceptions within the most recent 250-business-day window decreased from one to zero. The Swiss

Financial Market Supervisory Authority (FINMA) VaR multiplier derived from backtesting exceptions for market risk

risk-weighted assets was unchanged compared with the prior quarter, at 3.0.

Management value-at-risk (1-day, 95% confidence, 5 years of historical data) of the business divisions and

Group Items by general market risk type

1

Average by risk type

USD m

Min.

Max.

Period end

Average

Equity

Interest

rates

Credit

spreads

Foreign

exchange

Commodities

Global Wealth Management

 1

 2

 1

 1

 0

 1

 2

 0

 0

Personal & Corporate Banking

 0

 0

 0

 0

 0

 0

 0

 0

 0

Asset Management

 0

 0

 0

 0

 0

 0

 0

 0

 0

Investment Bank

 8

 23

 14

 16

 12

 10

 5

 2

 3

Non-core and Legacy

 1

 2

 1

 1

 0

 1

 1

 0

 0

Group Items

 4

 5

 4

 4

 1

 3

 4

 1

 0

Diversification effect

2,3

 (5)

 (5)

 (1)

 (4)

 (4)

 (1)

 0

Total as of 30.9.23

 10

 25

 15

 17

 12

 11

 7

 2

 3

Total as of 30.6.23

 7

 20

 18

 13

 8

 11

 6

 2

 3

1 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 value-at-risk (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. 2 The difference between the sum of the standalone VaR for the business divisions and Group Items and the total VaR. 

3 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.

Economic value of equity and net interest income sensitivity

The economic value of equity (EVE) sensitivity in the banking book of UBS AG to a +1 basis point parallel shift in

yield curves was negative USD 24.8m as of 30 September 2023, compared with negative USD 23.5m as of 30 June

2023. This excludes the sensitivity of USD 2.5m from additional tier 1 (AT1) capital instruments (as per specific

FINMA requirements) in contrast to general Basel Committee on Banking Supervision (BCBS) guidance. The quarter-

on-quarter change was driven by a longer modeled duration assigned to its own equity.

The majority of UBS AG’s interest rate risk in the banking book is a reflection of the net asset duration that it runs

to offset its modeled sensitivity of net USD 20.3m (30 June 2023: USD 18.8m) assigned to its equity, goodwill and

real estate, with the aim of generating a stable net interest income contribution. Of this, USD 14.4m and USD 4.9m

are attributable to the US dollar and the Swiss franc portfolios, respectively, (30 June 2023: USD 12.8m and

USD 5.1m, respectively). 

In addition to the sensitivity mentioned above, UBS AG calculates the six interest rate shock scenarios prescribed by

FINMA. The “Parallel up” scenario, assuming all positions were fair valued, was the most severe and would have

resulted in a change in EVE of negative USD 4.6bn, or 8.4%, of UBS AG’s tier 1 capital (30 June 2023: negative

USD 4.4bn, or 7.9%), which is well below the 15% threshold as per the BCBS supervisory outlier test for high levels

of interest rate risk in the banking book. 

The immediate effect on UBS AG’s tier 1 capital in the “Parallel up” scenario as of 30 September 2023 would have

been a decrease of USD 0.6bn, or 1.0% (30 June 2023: USD 0.4bn, or 0.7%), reflecting the fact that the vast

majority of its banking book is accrual accounted or subject to hedge accounting. The “Parallel up” scenario would

subsequently have a positive effect on net interest income, assuming a constant balance sheet. UBS AG also applies

granular internal interest rate shock scenarios to its banking book positions to monitor the book’s specific risk

profile.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Risk management and control 27

Interest rate risk – banking book

30.9.23

USD m

Effect on EVE

1

 – FINMA

Effect on EVE

1

 – BCBS

Scenarios

CHF

EUR

GBP

USD

Other

Total

Additional tier 1 (AT1) capital

instruments

Total

+1 bp

 (4.0)

 (0.7)

 0.0

 (20.2)

 0.1

 (24.8)

 2.5

 (22.2)

Parallel up

2

 (562.9)

 (140.8)

 7.9

 (3,906.8)

 (10.9)

 (4,613.6)

 476.3

 (4,137.2)

Parallel down

2

 630.8

 151.8

 (15.6)

 4,110.1

 11.4

 4,888.6

 (525.9)

 4,362.7

Steepener

3

 (268.9)

 (8.4)

 (12.2)

 (954.4)

 (18.2)

 (1,262.1)

 (54.8)

 (1,316.9)

Flattener

4

 159.0

 (13.6)

 12.7

 49.7

 13.5

 221.3

 161.0

 382.3

Short-term up

5

 (67.7)

 (54.6)

 15.1

 (1,563.3)

 5.3

 (1,665.2)

 342.8

 (1,322.4)

Short-term down

6

 71.7

 58.0

 (15.2)

 1,677.6

 (7.2)

 1,784.9

 (357.7)

 1,427.2

30.6.23

USD m

Effect on EVE

1

 – FINMA

Effect on EVE

1

 – BCBS

Scenarios

CHF

EUR

GBP

USD

Other

Total

Additional tier 1 (AT1) capital

instruments

Total

+1 bp

 (4.3)

 (0.9)

 (0.1)

 (18.3)

 0.0

 (23.5)

 2.8

 (20.7)

Parallel up

2

 (607.7)

 (157.2)

 (27.8)

 (3,561.0)

 (18.5)

 (4,372.3)

 534.2

 (3,838.1)

Parallel down

2

 676.1

 186.3

 18.5

 3,575.6

 18.6

 4,475.0

 (573.7)

 3,901.3

Steepener

3

 (252.9)

 (24.9)

 17.9

 (917.7)

 (11.7)

 (1,189.4)

 (53.5)

 (1,242.9)

Flattener

4

 135.6

 (1.1)

 (23.9)

 70.7

 6.6

 187.9

 171.2

 359.0

Short-term up

5

 (102.2)

 (49.5)

 (29.5)

 (1,374.6)

 (2.8)

 (1,558.6)

 374.3

 (1,184.3)

Short-term down

6

 106.5

 52.4

 29.6

 1,495.3

 3.0

 1,686.7

 (388.2)

 1,298.6

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.

Country risk 

UBS AG remains watchful of a range of geopolitical developments and political changes in a number of countries,

as well as international tensions arising from the Russia–Ukraine war, the escalating conflict in the Middle East and

US–China trade relations. UBS AG’s direct exposure to Israel is USD 0.1bn, mainly from collateralized over-the-

counter derivatives exposure to Israeli banks. Direct exposure to Gulf Cooperation Council countries is USD 2.1bn,

while direct exposure to Egypt, Jordan and Lebanon is limited, and there is no direct exposure to Iran, Iraq or Syria.

UBS AG’s direct exposure to Russia, Belarus and Ukraine is immaterial, and potential second-order impacts, such as

European energy security, continue to be monitored. UBS AG has significant country risk exposure to major

European economies, including France, Germany and the UK.

Inflation has abated to some extent in major Western economies, though there are still concerns regarding future

developments, and central banks’ monetary policy is in the spotlight. The potential for “higher-for-longer” interest

rates raises the prospect of a global recession, particularly as Chinese economic growth has been muted. This

combination of factors translates into a more uncertain and volatile environment, which increases the risk of

financial market disruptions. 

UBS AG continues to monitor potential trade policy disputes, as well as economic and political developments in

addition to those mentioned above. In 2023, several emerging markets have faced economic, political and market

pressures, particularly in light of interest rate hikes and a stronger US dollar. UBS AG’s exposure to emerging market

countries is 4% of its total country exposure, mainly in Asia.

›

Refer to the “Risk management and control” section of the Annual Report 2022 for more information on a

UBS Group AG consolidated basis

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Risk management and control 28

Non-financial risk

1

UBS is actively managing the non-financial risks emerging from the acquisition of the Credit Suisse Group, including

the current operation of dual corporate structures, and the scale, pace and complexity of the required integration

activities. These activities continue to be managed by our program run by the Group Integration Office. We place

an increased focus on maintaining and enhancing our control environment and continue to cooperate with

regulators to submit and execute implementation plans to meet regulatory requirements, including regulatory

remediation requirements applicable to Credit Suisse AG. In addition, the Group is closely monitoring operational

risk indicators, including attrition, to detect any potential for adverse impacts on the control environment. 

There is an increased risk of cyber-related operational disruption to business activities at our locations and / or those

of third parties due to operating an enlarged group of entities. This is combined with the increasingly dynamic

threat environment, which is intensified by current geopolitical factors and evidenced by the increased volumes and

sophistication of cyberattacks against financial institutions globally. 

UBS was not affected by significant cyber events in the third quarter of 2023 but, due to the high threat level

observed, remains on heightened alert to respond to and mitigate new threats. Given this backdrop, we are

continuing to invest in improving our technology infrastructure to enhance our information security and data

protection and improve our defense, detection and response capabilities against cyberattacks, including addressing

regulatory expectations and advancing overall organizational development. In addition, the Group faces multiple

related regulatory deadlines to enhance operational resilience between 2023 and 2026. To that end, a global

framework designed to drive enhancements in operational resilience continues to be implemented across all

business divisions and jurisdictions, as well as being provided to third parties, including third-party vendors, that are

of critical importance to us.

Following a post-incident review of the ION XTP ransomware attack, we are proceeding with improvements to our

frameworks for managing third parties that support our important business services and continue with actions to

enhance our cyber-risk assessments and controls over third-party vendors.

The increasing interest in data-driven advisory processes, and use of artificial intelligence (AI) and machine learning,

is opening up new questions related to the fairness of AI algorithms, data life cycle management, data ethics, data

privacy and security, and records management. We seek to enhance our frameworks to implement controls for

these risks and to meet regulatory expectations. In addition, new risks continue to emerge, such as those which

result from the demand from our clients for distributed ledger technology, blockchain-based assets and

cryptocurrencies; although we currently have limited exposure to such risks, and relevant control frameworks for

them are implemented and reviewed on a regular basis as they evolve.

Competition to find new business opportunities across the financial services sector, both for firms and for customers,

is increasing, particularly during periods of market volatility and rising interest rates. Thus, suitability risk, product

selection, cross-divisional service offerings, quality of advice and price transparency also remain areas of heightened

focus for UBS and for the industry as a whole.

Sustainable investing, and major legislation, such as the Consumer Duty Regulation in the United Kingdom, the

Swiss Financial Services Act (FIDLEG) in Switzerland, Regulation Best Interest (Reg BI) in the US and the Markets in

Financial Instruments Directive II (MiFID II) in the EU, all significantly affect the industry and have required

adjustments to control processes.

Cross-border risk remains an area of regulatory attention for global financial institutions, including a focus on

market access, such as third-country market access into the European Economic Area, and taxation of US persons.

Unintended permanent establishment remains an area of ongoing attention and the risk that tax authorities may,

on the basis of new interpretations of existing law, seek to impose taxation. We maintain a series of controls

designed to address these risks, and we are increasing the number of controls that are automated.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Risk management and control 29

Financial crime, including money laundering, terrorist financing, sanctions violations, fraud, bribery and corruption,

continues to present 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 for UBS. Money laundering and financial fraud techniques are becoming

increasingly sophisticated, and geopolitical volatility makes the sanctions landscape more complex, such as the

extensive and continuously evolving sanctions arising from the Russia–Ukraine war, which also requires constant

attention to prevent circumvention risks.

In the US, the Office of the Comptroller of the Currency (the OCC) issued a Cease and Desist Order against us in

May 2018 relating to our US branch anti-money-laundering (AML) and know-your-client (KYC) programs. In

response, we initiated an extensive program for the purpose of ensuring sustainable remediation of US-relevant

Bank Secrecy Act / AML issues across all our US legal entities. We have introduced significant improvements to the

framework and continue to evolve it in response to new and emerging risks.

We continue to focus on strategic enhancements to our global AML, KYC and sanctions programs.

In September 2022, the Securities and Exchange Commission (the SEC) and the Commodity Futures Trading

Commission (the CFTC) issued settlement orders relating to communications recordkeeping requirements in our US

broker-dealers and our registered swap dealers. In response, we continue to focus on a program to remediate

identified shortcomings.

1

 “UBS,” “we” and “our” for purposes of this sub-section refer to UBS AG and its consolidated subsidiaries, as applicable.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 30

Capital management

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

systemically relevant banks (SRBs). They should be read in conjunction with “Capital management” in the “Capital,

liquidity and funding, and balance sheet” section of the Annual Report 2022, which provides more information

about relevant capital management objectives, planning and activities, as well as the Swiss SRB total loss-absorbing

capacity framework, on a UBS Group AG consolidated basis.

UBS AG has contributed a significant portion of capital to, and provides substantial liquidity to, its subsidiaries.

Many of these subsidiaries are subject to regulations requiring compliance with minimum capital, liquidity and

similar requirements.

›

Refer to the 30 September 2023 Pillar 3 Report, available under “Pillar 3 disclosures” at

ubs.com/investors

, for more

information about additional regulatory disclosures for UBS Group AG on a consolidated basis, as well as its

significant regulated subsidiaries and sub-groups

Swiss SRB going and gone concern requirements and information

As of 30.9.23

RWA

LRD

USD m, except where indicated

in %

in %

Required going concern capital

Total going concern capital

 14.73

1

 47,316

 5.00

1

 52,105

Common equity tier 1 capital

 10.43

 33,508

 3.50

2

 36,474

of which: minimum capital

 4.50

 14,451

 1.50

 15,632

of which: buffer capital

 5.50

 17,662

 2.00

 20,842

of which: countercyclical buffer

 0.43

 1,394

Maximum additional tier 1 capital

 4.30

 13,809

 1.50

 15,632

of which: additional tier 1 capital

 3.50

 11,240

 1.50

 15,632

of which: additional tier 1 buffer capital

 0.80

 2,569

Eligible going concern capital

Total going concern capital

 17.14

 55,037

 5.28

 55,037

Common equity tier 1 capital

 13.51

 43,378

 4.16

 43,378

Total loss-absorbing additional tier 1 capital

 3.63

 11,660

 1.12

 11,660

of which: high-trigger loss-absorbing additional tier 1 capital

 3.26

 10,466

 1.00

 10,466

of which: low-trigger loss-absorbing additional tier 1 capital

3

 0.37

 1,194

 0.11

 1,194

Required gone concern capital

Total gone concern loss-absorbing capacity

4,5,6

 10.73

 34,442

 3.75

 39,079

of which: base requirement including add-ons for market share and LRD

 10.73

7

 34,442

 3.75

7

 39,079

Eligible gone concern capital

Total gone concern loss-absorbing capacity

 16.61

 53,349

 5.12

 53,349

Total tier 2 capital

 0.17

 536

 0.05

 536

of which: non-Basel III-compliant tier 2 capital

 0.17

 536

 0.05

 536

TLAC-eligible senior unsecured debt

 16.45

 52,814

 5.07

 52,814

Total loss-absorbing capacity

Required total loss-absorbing capacity

 25.46

 81,758

 8.75

 91,184

Eligible total loss-absorbing capacity

 33.75

 108,387

 10.40

 108,387

Risk-weighted assets / leverage ratio denominator

Risk-weighted assets

 321,134

Leverage ratio denominator

 1,042,106

1 Includes applicable add-ons of 1.44% for risk-weighted assets (RWA) and 0.50% for leverage ratio denominator (LRD). 2 Our minimum CET1 leverage ratio requirement of 3.5% consists of a 1.5% base

requirement, a 1.5% base buffer capital requirement, a 0.25% LRD add-on requirement and a 0.25% market share add-on requirement based on our Swiss credit business. 3 Existing outstanding low-trigger

additional tier 1 capital instruments qualify as going concern capital at the UBS AG consolidated level, as agreed with FINMA, until their first call date. As of their first call date, these instruments are eligible to meet

the gone concern requirements. 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 From 1 January 2023, the resolvability discount on the gone concern capital requirements for systemically important banks (SIBs) has been replaced with

reduced base gone concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical buffer requirements). 6 As of July 2024, FINMA will have the authority to

impose a surcharge of up to 25% of the total going concern capital requirements 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. 

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 31

UBS AG, on a consolidated basis, is subject to the going and gone concern requirements of the Swiss Capital

Adequacy Ordinance that include the too-big-to-fail (TBTF) provisions applicable to Swiss SRBs. The table above

provides the risk-weighted asset (RWA)- and leverage ratio denominator (LRD)-based requirements and information

as of 30 September 2023.

In November 2022, the Swiss Federal Council adopted amendments to the Banking Act and the Banking Ordinance,

which entered into force as of 1 January 2023. The amendments replaced the resolvability discount on the gone

concern capital requirements for systemically important banks (SIBs), including UBS, with reduced base gone

concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical

buffer requirements). In addition, as of July 2024, the Swiss Financial Market Supervisory Authority (FINMA) will

have the authority to impose a surcharge of up to 25% of the total going concern capital requirements based on

obstacles to an SIB’s resolvability identified in future resolvability assessments. UBS AG’s consolidated total gone

concern requirements remained substantially unchanged in the third quarter of 2023 as a result of these changes. 

UBS AG and UBS Switzerland AG are subject to going and gone concern requirements on a standalone basis.

Total loss-absorbing capacity

The table below provides Swiss SRB going and gone concern information based on the Swiss SRB framework and

requirements that are discussed under “Capital management” in the “Capital, liquidity and funding, and balance

sheet” section of the Annual Report 2022. Changes to the Swiss SRB framework and requirements after the

publication of the Annual Report 2022 are described above.

Swiss SRB going and gone concern information

USD m, except where indicated

30.9.23

30.6.23

31.12.22

Eligible going concern capital

Total going concern capital

 55,037

 55,017

 54,770

Total tier 1 capital

 55,037

 55,017

 54,770

Common equity tier 1 capital

 43,378

 43,300

 42,929

Total loss-absorbing additional tier 1 capital

 11,660

 11,718

 11,841

of which: high-trigger loss-absorbing additional tier 1 capital

 10,466

 10,528

 10,654

of which: low-trigger loss-absorbing additional tier 1 capital

 1,194

 1,189

 1,187

Eligible gone concern capital

Total gone concern loss-absorbing capacity

 53,349

 51,572

 46,991

Total tier 2 capital

 536

 539

 2,958

of which: low-trigger loss-absorbing tier 2 capital

 0

 0

 2,422

of which: non-Basel III-compliant tier 2 capital

 536

 539

 536

TLAC-eligible senior unsecured debt

 52,814

 51,033

 44,033

Total loss-absorbing capacity

Total loss-absorbing capacity

 108,387

 106,589

 101,761

Risk-weighted assets / leverage ratio denominator

Risk-weighted assets

 321,134

 323,406

 317,823

Leverage ratio denominator

 1,042,106

 1,048,313

 1,029,561

Capital and loss-absorbing capacity ratios (%)

Going concern capital ratio

 17.1

 17.0

 17.2

of which: common equity tier 1 capital ratio

 13.5

 13.4

 13.5

Gone concern loss-absorbing capacity ratio

 16.6

 15.9

 14.8

Total loss-absorbing capacity ratio

 33.8

 33.0

 32.0

Leverage ratios (%)

Going concern leverage ratio

 5.3

 5.2

 5.3

of which: common equity tier 1 leverage ratio

 4.2

 4.1

 4.2

Gone concern leverage ratio

 5.1

 4.9

 4.6

Total loss-absorbing capacity leverage ratio

 10.4

 10.2

 9.9

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 32

Total loss-absorbing capacity and movement 

Total loss-absorbing capacity (TLAC) increased by USD 1.8bn to USD 108.4bn in the third quarter of 2023.

Going concern capital and movement

Going concern capital was broadly stable at USD 55.0bn. Common equity tier 1 (CET1) capital increased by

USD 0.1bn to USD 43.4bn, mainly reflecting operating profit before tax of USD 1.3bn, offset by current tax

expenses of USD 0.5bn, additional dividend accruals of USD 0.5bn and negative effects from foreign currency

translation of USD 0.4bn.

Additional tier 1 capital decreased by USD 0.1bn to USD 11.7bn, reflecting interest rate risk hedge, foreign currency

translation and other effects.

Gone concern loss-absorbing capacity and movement

Total gone concern loss-absorbing capacity increased by USD 1.8bn to USD 53.3bn, mainly due to three new

issuances of TLAC-eligible senior unsecured debt denominated in US dollars of USD 4.5bn, partly offset by a call of

one TLAC-eligible unsecured debt instrument denominated in US dollars of USD 1.3bn, and interest rate risk hedge,

foreign currency translation and other effects. On 18 October 2023, UBS announced that it would redeem TLAC-

eligible senior unsecured debt on 8 November 2023 (ISIN CH0445624981 with a nominal amount of JPY 130bn,

issued on 9 November 2018). This instrument remained eligible as gone concern capital as of 30 September 2023.

›

Refer to “Bondholder information” at

 ubs.com/investors

for more information about the eligibility of capital and

senior unsecured debt instruments and about key features and terms and conditions of capital instruments

Loss-absorbing capacity and leverage ratios

The CET1 capital ratio increased to 13.5% from 13.4%, mainly reflecting a USD 2.3bn decrease in RWA. 

The CET1 leverage ratio increased to 4.2% from 4.1%, largely due to a USD 6.2bn decrease in the LRD.

The gone concern loss-absorbing capacity ratio increased to 16.6% from 15.9%, mainly due to the aforementioned

increase in gone concern loss-absorbing capacity. 

The gone concern leverage ratio increased to 5.1% from 4.9%, mainly reflecting the aforementioned increase in

gone concern loss-absorbing capacity.

Swiss SRB total loss-absorbing capacity movement

USD m

Going concern capital

Swiss SRB

Common equity tier 1 capital as of 30.6.23

 43,300

Operating profit before tax

 1,275

Current tax (expense) / benefit

 (484)

Foreign currency translation effects, before tax

 (352)

Other

1

 (362)

Common equity tier 1 capital as of 30.9.23

 43,378

Loss-absorbing additional tier 1 capital as of 30.6.23

 11,718

Interest rate risk hedge, foreign currency translation and other effects

 (58)

Loss-absorbing additional tier 1 capital as of 30.9.23

 11,660

Total going concern capital as of 30.6.23

 55,017

Total going concern capital as of 30.9.23

 55,037

Gone concern loss-absorbing capacity

Tier 2 capital as of 30.6.23

 539

Interest rate risk hedge, foreign currency translation and other effects

 (4)

Tier 2 capital as of 30.9.23

 536

TLAC-eligible senior unsecured debt as of 30.6.23

 51,033

Issuance of TLAC-eligible senior unsecured debt

 4,500

Call of TLAC-eligible senior unsecured debt

 (1,300)

Interest rate risk hedge, foreign currency translation and other effects

 (1,419)

TLAC-eligible senior unsecured debt as of 30.9.23

 52,814

Total gone concern loss-absorbing capacity as of 30.6.23

 51,572

Total gone concern loss-absorbing capacity as of 30.9.23

 53,349

Total loss-absorbing capacity

Total loss-absorbing capacity as of 30.6.23

 106,589

Total loss-absorbing capacity as of 30.9.23

 108,387

1 Includes dividend accruals for the current year (negative USD 0.5bn) and movements related to other items.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 33

Reconciliation of IFRS equity to Swiss SRB common equity tier 1 capital

USD m

30.9.23

30.6.23

31.12.22

Total IFRS equity

 53,181

 53,274

 56,940

Equity attributable to non-controlling interests

 (345)

 (352)

 (342)

Defined benefit plans, net of tax

 (379)

 (388)

 (311)

Deferred tax assets recognized for tax loss carry-forwards

 (3,734)

 (3,903)

 (4,077)

Deferred tax assets for unused tax credits

 (245)

 (117)

Deferred tax assets on temporary differences, excess over threshold

 (462)

 (319)

 (262)

Goodwill, net of tax

1

 (5,736)

 (5,761)

 (5,754)

Intangible assets, net of tax

 (139)

 (149)

 (150)

Expected losses on advanced internal ratings-based portfolio less provisions

 (492)

 (480)

 (471)

Unrealized (gains) / losses from cash flow hedges, net of tax

 4,560

 4,218

 4,234

Own credit related to (gains) / losses on financial liabilities measured at fair value that existed at the balance sheet date, net of tax

 (92)

 (391)

 (523)

Own credit related to (gains) / losses on derivative financial instruments that existed at the balance sheet date

 (86)

 (95)

 (105)

Prudential valuation adjustments

 (176)

 (207)

 (201)

Accruals for dividends to shareholders for 2022

 (6,000)

Other

2

 (2,477)

 (2,030)

 (51)

Total common equity tier 1 capital

 43,378

 43,300

 42,929

1 Includes goodwill related to significant investments in financial institutions of USD 19m as of 30 September 2023 (USD 19m as of 30 June 2023; USD 20m as of 31 December 2022) presented on the balance sheet

line Investments in associates. 2 Includes dividend accruals for the current year and other items. 

Additional information

Sensitivity to currency movements 

Risk-weighted assets

UBS AG estimates that a 10% depreciation of the US dollar against other currencies would have increased its RWA

by USD 14bn and its CET1 capital by USD 1.4bn as of 30 September 2023 (30 June 2023: USD 14bn and

USD 1.4bn, respectively) and decreased its CET1 capital ratio 14 basis points (30 June 2023: 13 basis points).

Conversely, a 10% appreciation of the US dollar against other currencies would have decreased its RWA by

USD 12bn and its CET1 capital by USD 1.3bn (30 June 2023: USD 13bn and USD 1.3bn, respectively) and increased

its CET1 capital ratio 13 basis points (30 June 2023: 13 basis points).

Leverage ratio denominator

UBS AG estimates that a 10% depreciation of the US dollar against other currencies would have increased its LRD

by USD 63bn as of 30 September 2023 (30 June 2023: USD 63bn) and decreased its CET1 leverage ratio 11 basis

points (30 June 2023: 11 basis points). Conversely, a 10% appreciation of the US dollar against other currencies

would have decreased its LRD by USD 57bn (30 June 2023: USD 57bn) and increased its CET1 leverage ratio

11 basis points (30 June 2023: 11 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.

›

Refer to “Active management of sensitivity to foreign exchange movements” under “Capital management” in the

“Capital, liquidity and funding, and balance sheet” section of the Annual Report 2022 for more information on a

UBS Group AG consolidated basis

Estimated effect on capital from litigation, regulatory and similar matters subject to provisions and contingent

liabilities

The estimated loss in capital that UBS AG could incur as a result of the risks associated with the matters is described

in “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this report.

UBS AG has employed for this purpose the advanced measurement approach (AMA) methodology that UBS uses

when determining the capital requirements associated with operational risks, based on a 99.9% confidence level

over a 12-month horizon. The methodology takes into consideration UBS and industry experience for the AMA

operational risk categories to which those matters correspond, as well as the external environment affecting risks

of these types, in isolation from other areas. On this basis, the maximum loss in capital that it could incur over a

12-month period as a result of the risks associated with these operational risk categories has been estimated at

USD 4.0bn as of 30 September 2023. This estimate is not related to and does not take into account any provisions

recognized for any of these matters and does not constitute a subjective assessment of the actual exposure in any

of these matters.

›

Refer to “Non-financial risk” in the “Risk management and control” section of the Annual Report 2022 for more

information on a UBS Group AG consolidated basis

›

Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this

report for more information

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 34

Risk-weighted assets 

During the third quarter of 2023, RWA decreased by USD 2.3bn to USD 321.1bn, reflecting decreases of USD 4.4bn

from model updates and USD 3.1bn from currency effects, partly offset by an increase of USD 5.2bn from asset

size and other movements.

Movement in risk-weighted assets by key driver

USD bn

RWA as of

30.6.23

Currency

effects

Methodology

and policy

changes

Model

updates /

changes

Regulatory

add-ons

Asset size

and other

1

RWA as of

30.9.23

Credit and counterparty credit risk

2

 205.5

 (3.0)

 0.4

 4.0

 207.0

Non-counterparty-related risk

3

 22.4

 (0.1)

 (0.1)

 22.1

Market risk

 14.1

 0.1

 1.3

 15.5

Operational risk

 81.4

 (4.9)

 76.5

Total

 323.4

 (3.1)

 (4.4)

 5.2

 321.1

1 Includes the Pillar 3 categories “Asset size,” “Credit quality of counterparties,” “Acquisitions and disposals” and “Other.” For more information, refer to the 30 September 2023 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 were USD 207.0bn as of 30 September 2023. The increase of USD 1.5bn

included a decrease related to currency effects of USD 3.0bn. 

Asset size and other movements resulted in a USD 4.0bn increase in RWA. 

–

Global Wealth Management RWA increased by USD 1.3bn, mainly due to higher RWA from loan balances that

carry a higher risk weighting when measured under the standardized approach.

–

Personal & Corporate Banking RWA increased by USD 1.1bn, primarily driven by higher RWA from loans.

–

Investment Bank RWA increased by USD 0.7bn, mainly due to an increase in RWA from loan commitments, partly

offset by lower RWA from securities financing transactions.

–

Group Items RWA increased by USD 1.1bn, mainly driven by higher RWA from nostro accounts, derivatives, and

securities financing transactions.

–

Asset Management RWA increased by USD 0.1bn.

–

Non-core and Legacy RWA decreased by USD 0.2bn. 

Model updates resulted in an RWA increase of USD 0.4bn. RWA increases of USD 1.0bn related to the phase-in of

model updates for hedge funds, USD 0.5bn related to updates to the Lombard model, USD 0.3bn related to a

model update for income-producing real estate and USD 0.3bn related to the Swiss corporate model were partly

offset by an RWA decrease of USD 1.5bn related to the recalibration of certain multipliers as a result of

improvements to models. The remaining variance was spread across various small model updates.

›

Refer to the “Risk management and control” section of this report for more information

›

Refer to the 30 September 2023 Pillar 3 Report, available under “Pillar 3 disclosures” at

ubs.com/investors

, for more

information on a UBS Group AG consolidated basis 

›

Refer to “Credit risk models” in the “Risk management and control” section of the Annual Report 2022 for more

information on a UBS Group AG consolidated basis

›

Refer to the “Recent developments” section of this report for more information about the Non-core and Legacy

business division

Market risk

Market risk RWA increased by USD 1.4bn to USD 15.5bn in the third quarter of 2023, driven by an increase of

USD 1.3bn from asset size and other movements in Global Markets in the Investment Bank and an increase of

USD 0.1bn related to ongoing parameter updates of the value-at-risk (VaR) model. UBS is in discussions with FINMA

regarding the integration of time decay into the regulatory VaR, which would replace the current add-on.

›

Refer to the “Risk management and control” section of this report for more information

›

Refer to the 30 September 2023 Pillar 3 Report, available under “Pillar 3 disclosures” at

 ubs.com/investors,

 for more

information on a UBS Group AG consolidated basis

›

Refer to ”Market risk” in the “Risk management and control” section of the Annual Report 2022 for more

information on a UBS Group AG consolidated basis

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 35

Operational risk

Operational risk RWA decreased by USD 4.9bn to USD 76.5bn. In the second quarter of 2023 we reflected

diversification effects at the level of UBS Group AG consolidated, which were allocated partly to UBS AG

consolidated in the third quarter of 2023. Furthermore, in the third quarter of 2023, we updated our methodology

that we use to allocate operational risk RWA to the business divisions and Group Items. The updated methodology

has been prospectively applied starting with the third quarter of 2023.

›

Refer to “Integration of Credit Suisse” in the “Recent developments” section of the UBS Group third quarter 2023

for more information about the updated allocation of operational risk RWA to the business divisions and Group

Items

›

Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this

report for more information about the French cross-border matter

›

Refer to “Non-financial risk” in the “Risk management and control” section of the Annual Report 2022 for

information about the advanced measurement approach model on a UBS Group AG consolidated basis

Risk-weighted assets by business division and Group Items

USD bn

Global Wealth

Management

Personal &

Corporate

Banking

Asset

Management

Investment

Bank

Non-core and

Legacy

1

Group 

Items

1

Total

RWA

30.9.23

Credit and counterparty credit risk

2

 71.4

 70.0

 2.4

 55.4

 1.4

 6.4

 207.0

Non-counterparty-related risk

3

 5.5

 1.8

 0.6

 3.7

 0.0

 10.5

 22.1

Market risk

 1.4

 0.0

 11.9

 1.6

 0.6

 15.5

Operational risk

 30.2

 10.3

 3.8

 13.1

 15.8

 3.3

 76.5

Total

 108.5

 82.1

 6.8

 84.2

 18.8

 20.7

 321.1

30.6.23

Credit and counterparty credit risk

2

 70.1

 69.7

 2.3

 56.2

 2.1

 5.2

 205.5

Non-counterparty-related risk

3

 5.7

 1.9

 0.6

 3.8

 0.0

 10.4

 22.4

Market risk

 1.7

 0.0

 10.4

 0.7

 1.4

 14.1

Operational risk

 37.6

 9.1

 3.2

 21.3

 10.1

 81.4

Total

 115.1

 80.7

 6.0

 91.7

 12.9

 17.0

 323.4

30.9.23 vs 30.6.23

Credit and counterparty credit risk

2

 1.3

 0.3

 0.1

 (0.7)

 (0.6)

 1.2

 1.5

Non-counterparty-related risk

3

 (0.2)

 (0.1)

 0.0

 (0.1)

 0.0

 0.1

 (0.3)

Market risk

 (0.2)

 0.0

 1.5

 0.9

 (0.8)

 1.4

Operational risk

 (7.4)

 1.1

 0.6

 (8.2)

 5.6

 3.3

 (4.9)

Total

 (6.6)

 1.4

 0.7

 (7.5)

 5.9

 3.8

 (2.3)

1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed Group Items. Prior periods have been revised to reflect these changes. 

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 (30 September 2023: USD 11.0bn; 30 June 2023: USD 10.9bn), as well as property, equipment, software and other items (30 September 2023: USD 11.1bn;

30 June 2023: USD 11.5bn).

Leverage ratio denominator

During the third quarter of 2023, the LRD decreased by USD 6.2bn to USD 1,042.1bn, driven by currency effects

of USD 14.4bn, partly offset by asset size and other movements of USD 8.2bn.

Movement in leverage ratio denominator by key driver

USD bn

LRD as of 

30.6.23

Currency 

effects

Asset size and 

other

LRD as of 

30.9.23

On-balance sheet exposures (excluding derivatives and securities financing transactions)

1

 833.5

 (11.7)

 (1.0)

 820.8

Derivatives

 93.1

 (1.4)

 7.2

 98.9

Securities financing transactions

 98.3

 (0.9)

 2.0

 99.4

Off-balance sheet items

 34.5

 (0.4)

 0.1

 34.1

Deduction items

 (11.1)

 0.0

 (0.1)

 (11.2)

Total

 1,048.3

 (14.4)

 8.2

 1,042.1

1 The exposures exclude derivative financial instruments, cash collateral receivables on derivative instruments, receivables from securities financing transactions, and margin loans, as well as prime brokerage receivables

and financial assets at fair value not held for trading, both related to securities financing transactions. These exposures are presented separately under Derivatives and Securities financing transactions in this table. 

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Capital management 36

The LRD movements described below exclude currency effects. 

On-balance sheet exposures decreased by USD 1.0bn, mainly due to lower lending balances and trading portfolio

assets, partly offset by higher central bank balances and high-quality liquid asset securities.

Derivative exposures increased by USD 7.2bn, mainly due to market-driven movements on foreign-currency

contracts and higher trading volumes in equity contracts in the Investment Bank.

Securities financing transactions increased by USD 2.0bn, mainly due to client-driven increases in brokerage

receivables.

›

Refer to the “Balance sheet and off-balance sheet” section of this report for more information about 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

1

Group Items

1

Total 

30.9.23

Total IFRS assets

 359.7

 237.4

 17.9

 370.3

 13.6

 98.7

 1,097.5

Difference in scope of consolidation

2

 0.0

 0.0

 (14.1)

 (0.1)

 0.0

 0.0

 (14.2)

Less: derivatives and securities financing transactions

3

 (25.9)

 (14.4)

 (0.1)

 (188.6)

 (9.5)

 (24.0)

 (262.5)

On-balance sheet exposures

 333.7

 223.0

 3.7

 181.6

 4.1

 74.8

 820.8

Derivatives

 6.0

 2.3

 0.0

 87.8

 1.7

 1.1

 98.9

Securities financing transactions

 22.5

 12.5

 0.1

 40.4

 1.3

 22.6

 99.4

Off-balance sheet items

 7.5

 16.4

 7.8

 0.9

 1.6

 34.1

Items deducted from Swiss SRB tier 1 capital

 (5.2)

 (0.2)

 (1.2)

 (0.4)

 0.0

 (4.2)

 (11.2)

Total

 364.4

 254.2

 2.6

 317.2

 7.9

 95.8

 1,042.1

30.6.23

Total IFRS assets

 375.1

 241.7

 18.8

 363.3

 12.6

 84.7

 1,096.3

Difference in scope of consolidation

2

 0.0

 0.0

 (15.1)

 (0.1)

 0.0

 0.0

 (15.2)

Less: derivatives and securities financing transactions

3

 (27.8)

 (14.5)

 (0.1)

 (179.2)

 (9.9)

 (16.2)

 (247.6)

On-balance sheet exposures

 347.3

 227.2

 3.6

 184.0

 2.8

 68.6

 833.5

Derivatives

 6.1

 1.3

 0.0

 83.2

 1.9

 0.7

 93.1

Securities financing transactions

 24.5

 13.4

 0.1

 41.8

 1.2

 17.3

 98.3

Off-balance sheet items

 9.6

 16.9

 7.2

 0.0

 0.8

 34.5

Items deducted from Swiss SRB tier 1 capital

 (5.2)

 (0.2)

 (1.2)

 (0.4)

 0.0

 (4.1)

 (11.1)

Total

 382.3

 258.7

 2.4

 315.7

 5.9

 83.4

 1,048.3

30.9.23 vs 30.6.23

Total IFRS assets

 (15.5)

 (4.3)

 (0.9)

 7.0

 1.0

 13.9

 1.2

Difference in scope of consolidation

2

 0.0

 0.0

 0.9

 0.0

 0.0

 0.0

 1.0

Less: derivatives and securities financing transactions

3

 1.9

 0.1

 0.0

 (9.4)

 0.3

 (7.8)

 (14.8)

On-balance sheet exposures

 (13.6)

 (4.2)

 0.1

 (2.4)

 1.3

 6.2

 (12.7)

Derivatives

 (0.1)

 1.1

 0.0

 4.7

 (0.3)

 0.3

 5.7

Securities financing transactions

 (2.0)

 (0.9)

 0.0

 (1.4)

 0.1

 5.3

 1.1

Off-balance sheet items

 (2.1)

 (0.5)

 0.6

 0.9

 0.8

 (0.3)

Items deducted from Swiss SRB tier 1 capital

 0.0

 0.0

 0.0

 0.0

 0.0

 (0.1)

 (0.1)

Total

 (17.8)

 (4.5)

 0.1

 1.5

 2.0

 12.5

 (6.2)

1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed Group Items. Prior periods have been revised to reflect these changes. 

2 Represents the difference between the IFRS and the regulatory scope of consolidation, which is the applicable scope for the leverage ratio denominator calculation. 3 The exposures consist of derivative financial

instruments, cash collateral receivables on derivative instruments, receivables from securities financing transactions, and margin loans, as well as prime brokerage receivables and financial assets at fair value not held

for trading, both related to securities financing transactions, all of which are in accordance with the regulatory scope of consolidation. These exposures are presented separately under Derivatives and Securities

financing transactions in this table.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 37

Liquidity and funding management

Strategy, objectives and governance 

This section provides liquidity and funding management information and should be read in conjunction with

“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the

Annual Report 2022, which provides more information about the Group’s strategy, objectives and governance in

connection with liquidity and funding management.

Liquidity coverage ratio

The quarterly average liquidity coverage ratio (the LCR) of UBS AG consolidated increased 5.6 percentage points to

176.6%. The average LCR for the third quarter of 2023 was calculated based on a simple average of 63 data points

in the third quarter of 2023. The average LCR for the second quarter of 2023 was reported for the first time and

calculated based on a simple average of 15 data points in the second quarter of 2023 from the formal date of the

acquisition of the Credit Suisse Group, i.e., 12 June 2023, until 30 June 2023. The movement in the average LCR

was primarily driven by an increase in high-quality liquid assets (HQLA) of USD 6.1bn to USD 230.9bn, mainly due

to proceeds received from debt issued. Net cash outflows remained largely unchanged at USD 131.0bn.

Refer to the

30 September 2023 Pillar 3 Report, available under “Pillar 3 disclosures” at

ubs.com/investors

, and to

“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the

Annual Report 2022 for more information about the LCR on a UBS Group AG consolidated basis 

Liquidity coverage ratio

USD bn, except where indicated

Average 3Q23

1

Average 2Q23

1

High-quality liquid assets

 230.9

 224.8

Net cash outflows

2

 131.0

 131.5

Liquidity coverage ratio (%)

3

 176.6

 170.9

1 Calculated based on an average of 63 data points in the third quarter and 15 data points in the second quarter of 2023. 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.

Net stable funding ratio 

As of 30 September 2023, the net stable funding ratio (the NSFR) of UBS AG consolidated increased 3.5 percentage

points to 121.7%.

Required stable funding decreased by USD 10.5bn to USD 467.1bn, mainly driven by lower lending and trading

assets, partly offset by higher derivative balances. Available stable funding increased by USD 4.0bn to USD 568.5bn,

mainly driven by debt issued at fair value.

›

Refer to the 30 September 2023 Pillar 3 Report, available under “Pillar 3 disclosures” at

ubs.com/investors

, and to

“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the

Annual Report 2022 for more information about the NSFR on a UBS Group AG consolidated basis

Net stable funding ratio

USD bn, except where indicated

30.9.23

30.6.23

Available stable funding

568.5

564.5

Required stable funding

467.1

477.6

Net stable funding ratio (%)

121.7

118.2

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 38

Balance sheet and off-balance sheet

Strategy, objectives and governance

This section provides balance sheet and off-balance sheet information and should be read in conjunction with

“Balance sheet and off-balance sheet” in the “Capital, liquidity and funding, and balance sheet” section of the

Annual Report 2022, which provides more information about the balance sheet and off-balance sheet positions.

Balances disclosed in this report represent quarter-end positions, unless indicated otherwise. Intra-quarter balances

fluctuate in the ordinary course of business and may differ from quarter-end positions.

Balance sheet assets (30 September 2023 vs 30 June 2023)

Total assets were USD 1,097.5bn as of 30 September 2023. The increase of USD 1.2bn included negative currency

effects of approximately USD 13.7bn.

Derivatives and cash collateral receivables on derivative instruments increased by USD 12.2bn, mainly in Derivatives

& Solutions in the Investment Bank, primarily reflecting market-driven movements on foreign-currency contracts

amid volatility in exchange rates. Brokerage receivables increased by USD 3.2bn, mainly in Financing in the

Investment Bank, driven by lower netting effects. The increases were largely offset by a decrease in lending assets

by USD 12.5bn, reflecting currency effects of approximately USD 6.3bn and lower balances with UBS Group AG.

Trading assets decreased by USD 2.5bn, primarily reflecting lower inventory levels held to hedge client positions in

Financing.

›

Refer to the “Consolidated financial statements” section of this report for more information

Assets

As of

% change from

USD bn

30.9.23

30.6.23

30.6.23

Cash and balances at central banks

 161.7

 159.4

 1

Lending

1

 406.5

 419.0

 (3)

Securities financing transactions at amortized cost

 61.3

 62.0

 (1)

Trading assets

 117.7

 120.2

 (2)

Derivatives and cash collateral receivables on derivative instruments

 171.3

 159.1

 8

Brokerage receivables

 24.4

 21.2

 15

Other financial assets measured at amortized cost

 52.9

 52.2

 1

Other financial assets measured at fair value

2

 64.9

 65.9

 (2)

Non-financial assets

 36.9

 37.2

 (1)

Total assets

 1,097.5

 1,096.3

 0

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 (30 September 2023 vs 30 June 2023)

Total liabilities were USD 1,044.4bn as of 30 September 2023. The increase of USD 1.4bn included negative

currency effects of approximately USD 12.1bn.

Derivatives and cash collateral payables on derivative instruments increased by USD 7.0bn, mainly in Derivatives &

Solutions, primarily reflecting market-driven movements, broadly in line with the asset side. Debt issued designated

at fair value and long-term debt issued measured at amortized cost increased by USD 6.8bn, mainly driven by

issuances of debt issued designated at fair value in Derivatives & Solutions. The increases were partly offset by a

USD 6.1bn decrease in securities financing transactions at amortized cost, mainly reflecting roll-offs. Trading

liabilities decreased by USD 3.6bn, in Financing, mainly reflecting a decrease in short positions due to lower hedging

requirements. Brokerage payables decreased by USD 2.4bn, with a decrease in client deposits.

Customer deposits were broadly stable, with net inflows, mainly in Global Wealth Management, of USD 7.7bn,

primarily reflecting higher time deposits, largely offset by currency effects and lower balances with UBS Group AG.

The “Liabilities by product and currency” table in this section provides more information about funding sources.

›

Refer to “Bondholder information” at

 ubs.com/investors

for more information about capital and senior debt

instruments

›

Refer to the “Consolidated financial statements” section of this report for more information

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 39

Liabilities and equity

As of 

% change from

USD bn

30.9.23

30.6.23

30.6.23

Short-term borrowings

1,2

 52.6

 51.9

 1

Securities financing transactions at amortized cost

 6.2

 12.3

 (49)

Customer deposits

 521.5

 521.7

 0

Funding from UBS Group AG measured at amortized cost

 63.4

 61.4

 3

Debt issued designated at fair value and long-term debt issued measured at amortized cost

2

 112.5

 105.7

 6

Trading liabilities

 32.0

 35.6

 (10)

Derivatives and cash collateral payables on derivative instruments

 165.8

 158.8

 4

Brokerage payables

 41.0

 43.4

 (5)

Other financial liabilities measured at amortized cost

 11.1

 11.7

 (5)

Other financial liabilities designated at fair value

 30.0

 31.4

 (4)

Non-financial liabilities

 8.1

 9.1

 (11)

Total liabilities

 1,044.4

 1,043.0

 0

Share capital

 0.4

 0.4

 0

Share premium

 24.6

 24.6

 0

Retained earnings

 28.4

 27.8

 2

Other comprehensive income

3

 (0.6)

 0.1

Total equity attributable to shareholders

 52.8

 52.9

 0

Equity attributable to non-controlling interests

 0.3

 0.4

 (2)

Total equity

 53.2

 53.3

 0

Total liabilities and equity

 1,097.5

 1,096.3

 0

1 Consists of short-term debt issued measured at amortized cost and amounts due to 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.

Equity (30 September 2023 vs 30 June 2023)

Equity attributable to shareholders decreased by USD 86m to USD 52,836m as of 30 September 2023.

The decrease of USD 86m was mainly driven by negative total comprehensive income attributable to shareholders

of USD 86m, reflecting net profit of USD 932m and negative other comprehensive income (OCI) of USD 1,018m.

OCI mainly included negative cash flow hedge OCI of USD 372m, negative OCI related to foreign currency

translation of USD 348m and negative OCI related to own credit on financial liabilities designated at fair value of

USD 284m.

›

Refer to the “UBS AG consolidated performance” and “Consolidated financial statements” sections of this report

for more information

›

Refer to “Reconciliation of IFRS equity to Swiss SRB common equity tier 1 capital” in the “Capital management”

section of this report for more information about the effects of OCI on common equity tier 1 capital

Liabilities by product and currency

USD equivalent

All currencies

of which: USD

of which: CHF

of which: EUR

USD bn

30.9.23

30.6.23

30.9.23

30.6.23

30.9.23

30.6.23

30.9.23

30.6.23

Short-term borrowings

52.6

51.9

36.0

33.0

3.9

4.5

5.1

6.0

of which: amounts due to banks

16.2

16.3

8.9

8.2

3.8

4.3

0.5

0.7

of which: short-term debt issued

1,2

36.4

35.6

27.2

24.8

0.1

0.1

4.6

5.3

Securities financing transactions at amortized cost

6.2

12.3

5.3

11.8

0.0

0.0

0.3

0.2

Customer deposits

521.5

521.7

226.7

217.9

197.0

202.2

48.7

51.8

of which: demand deposits

145.9

162.6

40.0

42.1

58.4

63.8

25.5

31.1

of which: retail savings / deposits

148.1

153.8

30.9

30.0

112.7

118.9

4.4

4.9

of which: sweep deposits

40.2

45.5

40.2

45.5

0.0

0.0

0.0

0.0

of which: time deposits

187.4

159.8

115.6

100.4

25.9

19.5

18.8

15.8

Funding from UBS Group AG measured at amortized cost

63.4

61.4

39.7

37.0

2.4

2.5

18.9

19.5

Debt issued designated at fair value and long-term debt issued measured at amortized

cost

2

112.5

105.7

72.1

65.7

16.4

16.4

14.3

13.8

Trading liabilities

32.0

35.6

11.3

11.1

1.1

1.3

9.1

12.7

Derivatives and cash collateral payables on derivative instruments

165.8

158.8

139.3

133.7

3.5

2.6

13.7

11.8

Brokerage payables

41.0

43.4

30.7

32.4

0.5

0.7

2.1

2.4

Other financial liabilities measured at amortized cost 

11.1

11.7

6.8

5.1

2.6

2.3

0.1

1.6

Other financial liabilities designated at fair value

30.0

31.4

7.7

7.2

0.0

0.1

4.4

4.8

Non-financial liabilities

8.1

9.1

2.1

3.1

1.7

1.7

2.2

2.2

Total liabilities

1,044.4

1,043.0

577.8

558.2

229.2

234.2

118.9

126.8

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.

UBS AG third quarter 2023 report |

Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 40

Off-balance sheet (30 September 2023 vs 30 June 2023)

Guarantees increased by USD 1.0bn, mainly in Group Treasury, relating to guarantees issued to corporate clients.

Loan commitments increased by USD 2.3bn, mainly in the Investment Bank. Committed unconditionally revocable

credit lines decreased by USD 2.1bn, mainly driven by credit lines provided to clients in Global Wealth Management

and in Global Banking in the Investment Bank. Forward starting reverse repurchase agreements increased by

USD 5.4bn, in Group Treasury, reflecting fluctuations in levels of business division activity in short-dated securities

financing transactions.

Off-balance sheet

As of

% change from

USD bn

30.9.23

30.6.23

30.6.23

Guarantees

1,2

 23.0

 22.0

 4

Loan commitments

1

 42.3

 40.0

 6

Committed unconditionally revocable credit lines

 42.6

 44.7

 (5)

Forward starting reverse repurchase agreements

 10.4

 5.0

 110

1 Guarantees and loan commitments are shown net of sub-participations. 2 Includes guarantees measured at fair value through profit or loss.

UBS AG third quarter 2023 report |

Consolidated financial statements 41

Consolidated financial

statements

Unaudited

Table of contents

UBS AG interim consolidated financial 

statements (unaudited)

42

43

44

45

46

47

1

48

2

49

3

49

4

49

5

50

6

50

7

57

8

63

9

64

10

65

11

65

12

65

13

66

14

66

15

UBS AG third quarter 2023 report |

Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 42

UBS AG interim consolidated

financial statements (unaudited)

Income statement

For the quarter ended

Year-to-date

USD m

Note

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Interest income from financial instruments measured at amortized cost and fair value through

other comprehensive income

3

 5,974

 5,483

 3,081

 16,272

 7,607

Interest expense from financial instruments measured at amortized cost

3

 (5,357)

 (4,607)

 (1,794)

 (13,818)

 (3,706)

Net interest income from financial instruments measured at fair value through profit or loss

and other

3

 368

 430

 278

 1,224

 1,045

Net interest income

3

 984

 1,305

 1,565

 3,678

 4,946

Other net income from financial instruments measured at fair value through profit or loss

 2,467

 2,337

 1,792

 7,476

 5,637

Fee and commission income

4

 5,097

 5,008

 4,971

 15,180

 16,074

Fee and commission expense

4

 (431)

 (419)

 (476)

 (1,297)

 (1,410)

Net fee and commission income

4

 4,666

 4,589

 4,495

 13,883

 14,664

Other income

 231

 237

 456

 624

 1,591

Total revenues

 8,348

 8,468

 8,308

 25,661

 26,838

Credit loss expense / (release)

7

 27

 16

 (3)

 80

 22

Personnel expenses

5

 3,951

 3,847

 3,617

 11,697

 11,613

General and administrative expenses

6

 2,585

 2,443

 2,077

 8,011

 6,674

Depreciation, amortization and impairment of non-financial assets

 510

 707

 458

 1,686

 1,358

Operating expenses

 7,047

 6,997

 6,152

 21,393

 19,644

Operating profit / (loss) before tax

 1,275

 1,456

 2,159

 4,188

 7,171

Tax expense / (benefit)

 339

 332

 551

 1,115

 1,577

Net profit / (loss)

 936

 1,124

 1,608

 3,072

 5,594

Net profit / (loss) attributable to non-controlling interests

 5

 4

 9

 17

 28

Net profit / (loss) attributable to shareholders

 932

 1,120

 1,598

 3,055

 5,566

UBS AG third quarter 2023 report |

Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 43

Statement of comprehensive income

For the quarter ended

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Comprehensive income attributable to shareholders

1

Net profit / (loss)

 932

 1,120

 1,598

 3,055

 5,566

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

 (646)

 307

 (1,097)

 (114)

 (2,556)

Effective portion of changes in fair value of hedging instruments designated as net investment hedges, before tax

 292

 (149)

 467

 18

 1,113

Foreign currency translation differences on foreign operations reclassified to the income statement

 2

 (3)

 24

 (1)

 32

Effective portion of changes in fair value of hedging instruments designated as net investment hedges reclassified to

the income statement

 0

 (1)

 (3)

 (3)

 (7)

Income tax relating to foreign currency translations, including the effect of net investment hedges

 4

 (3)

 6

 (1)

 14

Subtotal foreign currency translation, net of tax

 (348)

 151

 (603)

 (102)

 (1,405)

Financial assets measured at fair value through other comprehensive income

Net unrealized gains / (losses), before tax

 (1)

 (1)

 (3)

 0

 (445)

Net realized (gains) / losses reclassified to the income statement from equity

 0

 0

 0

 1

 0

Reclassification of financial assets to Other financial assets measured at amortized cost

2

 449

Income tax relating to net unrealized gains / (losses)

 0

 0

 0

 0

 (3)

Subtotal financial assets measured at fair value through other comprehensive income, net of tax

 (1)

 (1)

 (3)

 1

 0

Cash flow hedges of interest rate risk

Effective portion of changes in fair value of derivative instruments designated as cash flow hedges, before tax

 (940)

 (1,082)

 (2,053)

 (1,635)

 (5,816)

Net (gains) / losses reclassified to the income statement from equity

 479

 413

 16

 1,241

 (370)

Income tax relating to cash flow hedges

 89

 127

 373

 86

 1,168

Subtotal cash flow hedges, net of tax

 (372)

 (542)

 (1,664)

 (308)

 (5,018)

Cost of hedging

Cost of hedging, before tax

 (1)

 11

 17

 5

 114

Income tax relating to cost of hedging 

 0

 0

 (3)

 0

 (3)

Subtotal cost of hedging, net of tax

 (1)

 11

 14

 5

 111

Total other comprehensive income that may be reclassified to the income statement, net of tax

 (722)

 (381)

 (2,257)

 (405)

 (6,312)

Other comprehensive income that will not be reclassified to the income statement

Defined benefit plans

Gains / (losses) on defined benefit plans, before tax

 6

 (13)

 146

 26

 401

Income tax relating to defined benefit plans

 (17)

 (37)

 40

 (49)

 14

Subtotal defined benefit plans, net of tax

 (12)

 (50)

 186

 (23)

 415

Own credit on financial liabilities designated at fair value

Gains / (losses) from own credit on financial liabilities designated at fair value, before tax

 (312)

 (212)

 452

 (455)

 1,171

Income tax relating to own credit on financial liabilities designated at fair value

 27

 61

 (116)

 71

 (142)

Subtotal own credit on financial liabilities designated at fair value, net of tax

 (284)

 (151)

 335

 (384)

 1,029

Total other comprehensive income that will not be reclassified to the income statement, net of tax

 (296)

 (201)

 521

 (408)

 1,444

Total other comprehensive income

 (1,018)

 (582)

 (1,735)

 (812)

 (4,868)

Total comprehensive income attributable to shareholders

 (86)

 538

 (137)

 2,243

 698

Comprehensive income attributable to non-controlling interests

Net profit / (loss)

 5

 4

 9

 17

 28

Total other comprehensive income that will not be reclassified to the income statement, net of tax

 (11)

 (3)

 (17)

 (9)

 (27)

Total comprehensive income attributable to non-controlling interests

 (6)

 1

 (8)

 8

 1

Total comprehensive income 

Net profit / (loss)

 936

 1,124

 1,608

 3,072

 5,594

Other comprehensive income 

 (1,029)

 (585)

 (1,753)

 (822)

 (4,895)

of which: other comprehensive income that may be reclassified to the income statement

 (722)

 (381)

 (2,257)

 (405)

 (6,312)

of which: other comprehensive income that will not be reclassified to the income statement

 (307)

 (204)

 504

 (417)

 1,416

Total comprehensive income 

 (93)

 539

 (145)

 2,251

 699

1 Refer to the “UBS AG consolidated performance” section of this report for more information. 2 Effective 1 April 2022, a portfolio of assets previously classified as Financial assets measured at fair value through

other comprehensive income was reclassified to Other financial assets measured at amortized cost. As a result, the related cumulative fair value losses of USD 449m before tax and USD 333m after tax, previously

recognized in Other comprehensive income, have been removed from equity and adjusted against the value of the assets at the reclassification date.

UBS AG third quarter 2023 report |

Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 44

Balance sheet

USD m

Note

30.9.23

30.6.23

31.12.22

Assets

Cash and balances at central banks

 161,720

 159,425

 169,445

Amounts due from banks

 20,151

 21,395

 14,671

Receivables from securities financing transactions measured at amortized cost

 61,284

 61,977

 67,814

Cash collateral receivables on derivative instruments

 9

 36,302

 35,068

 35,033

Loans and advances to customers

 7

 386,315

 397,596

 390,027

Other financial assets measured at amortized cost

 10

 52,923

 52,180

 53,389

Total financial assets measured at amortized cost

 718,693

 727,642

 730,379

Financial assets at fair value held for trading

 8

 117,664

 120,232

 108,034

of which: assets pledged as collateral that may be sold or repledged by counterparties

 39,135

 39,568

 36,742

Derivative financial instruments

8, 9

 135,016

 124,046

 150,109

Brokerage receivables

 8

 24,431

 21,218

 17,576

Financial assets at fair value not held for trading

 8

 62,638

 63,714

 59,408

Total financial assets measured at fair value through profit or loss

 339,749

 329,210

 335,127

Financial assets measured at fair value through other comprehensive income

 8

 2,213

 2,217

 2,239

Investments in associates

 1,131

 1,109

 1,101

Property, equipment and software

 10,876

 11,193

 11,316

Goodwill and intangible assets

 6,240

 6,281

 6,267

Deferred tax assets

 9,610

 9,411

 9,354

Other non-financial assets

 10

 9,024

 9,254

 9,652

Total assets

 1,097,536

 1,096,318

 1,105,436

Liabilities

Amounts due to banks

 16,242

 16,290

 11,596

Payables from securities financing transactions measured at amortized cost

 6,249

 12,320

 4,202

Cash collateral payables on derivative instruments

 9

 32,442

 31,445

 36,436

Customer deposits

 521,540

 521,657

 527,171

Funding from UBS Group AG measured at amortized cost

 11

 63,412

 61,445

 56,147

Debt issued measured at amortized cost

13

 65,285

 62,561

 59,499

Other financial liabilities measured at amortized cost

 10

 11,114

 11,673

 10,391

Total financial liabilities measured at amortized cost

 716,283

 717,392

 705,442

Financial liabilities at fair value held for trading

 8

 31,990

 35,616

 29,515

Derivative financial instruments

8, 9

 133,377

 127,367

 154,906

Brokerage payables designated at fair value

 8

 40,982

 43,357

 45,085

Debt issued designated at fair value

8, 12

 83,601

 78,741

 71,842

Other financial liabilities designated at fair value

8, 10

 30,011

 31,425

 32,033

Total financial liabilities measured at fair value through profit or loss

 319,962

 316,506

 333,382

Provisions

 15

 2,318

 3,817

 3,183

Other non-financial liabilities

 10

 5,791

 5,330

 6,489

Total liabilities

 1,044,355

 1,043,044

 1,048,496

Equity

Share capital

 386

 386

 338

Share premium

 24,595

 24,594

 24,648

Retained earnings

 28,410

 27,806

 31,746

Other comprehensive income recognized directly in equity, net of tax

 (556)

 136

 (133)

Equity attributable to shareholders

 52,836

 52,922

 56,598

Equity attributable to non-controlling interests

 345

 352

 342

Total equity

 53,181

 53,274

 56,940

Total liabilities and equity

 1,097,536

 1,096,318

 1,105,436

UBS AG third quarter 2023 report |

Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 45

Statement of changes in equity

USD m

Share

capital and

share

premium

Retained 

earnings

OCI recognized 

directly in

equity, 

net of tax

1

of which: 

foreign

currency

translation

of which:

cash flow

hedges

Total equity 

attributable to 

shareholders

Balance as of 1 January 2023

2

 24,985

 31,746

 (133)

 4,098

 (4,234)

 56,598

Premium on shares issued and warrants exercised

 (5)

3

 (5)

Tax (expense) / benefit

 0

 0

Dividends

 (6,000)

 (6,000)

Translation effects recognized directly in retained earnings

 18

 (18)

 (18)

 0

Share of changes in retained earnings of associates and joint ventures

 (1)

 (1)

New consolidations / (deconsolidations) and other increases / (decreases)

 0

 0

Total comprehensive income for the period

 2,648

 (405)

 (102)

 (308)

 2,243

of which: net profit / (loss)

 3,055

 3,055

of which: OCI, net of tax

 (408)

 (405)

 (102)

 (308)

 (812)

Balance as of 30 September 2023

2

 24,981

 28,410

 (556)

 3,996

 (4,560)

 52,836

Non-controlling interests as of 30 September 2023

 345

Total equity as of 30 September 2023

 53,181

Balance as of 1 January 2022

2

 24,991

 27,912

 5,200

 4,617

 628

 58,102

Tax (expense) / benefit

 6

 6

Dividends

 (4,200)

 (4,200)

Translation effects recognized directly in retained earnings

 (44)

 44

 44

 0

Share of changes in retained earnings of associates and joint ventures

 0

 0

New consolidations / (deconsolidations) and other increases / (decreases)

 4

 3

 (3)

 4

Total comprehensive income for the period

 7,010

 (6,312)

 (1,405)

 (5,018)

 698

of which: net profit / (loss)

 5,566

 5,566

of which: OCI, net of tax

 1,444

 (6,312)

 (1,405)

 (5,018)

 (4,868)

Balance as of 30 September 2022

2

 25,001

 30,681

 (1,072)

 3,212

 (4,346)

 54,610

Non-controlling interests as of 30 September 2022

 330

Total equity as of 30 September 2022

 54,941

1 Excludes other comprehensive income related to defined benefit plans and own credit that is recorded directly in Retained earnings. 2 Excludes non-controlling interests. 3 Includes decreases related to recharges

by UBS Group AG for share-based compensation awards granted to employees of UBS AG or its subsidiaries. 

UBS AG third quarter 2023 report |

Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 46

Statement of cash flows

Year-to-date

USD m

30.9.23

30.9.22

Cash flow from / (used in) operating activities

Net profit / (loss)

 3,072

 5,594

Non-cash items included in net profit and other adjustments:

Depreciation, amortization and impairment of non-financial assets

 1,686

 1,358

Credit loss expense / (release)

 80

 22

Share of net (profit) / loss of associates and joint ventures and impairment related to associates

 (79)

 (31)

Deferred tax expense / (benefit)

 (208)

 553

Net loss / (gain) from investing activities

 33

 (934)

Net loss / (gain) from financing activities

 (423)

 (22,615)

Other net adjustments

 1,333

 14,674

Net change in operating assets and liabilities:

1

Amounts due from banks and amounts due to banks

 (3,255)

 1,808

Securities financing transactions measured at amortized cost

 7,808

 5,347

Cash collateral on derivative instruments

 (5,375)

 (5,320)

Loans and advances to customers and customer deposits

 (3,067)

 (17,474)

Financial assets and liabilities at fair value held for trading and derivative financial instruments

 (15,217)

 23,045

Brokerage receivables and payables

 (10,726)

 3,243

Financial assets at fair value not held for trading and other financial assets and liabilities

 178

 4,185

Provisions and other non-financial assets and liabilities

 370

 (4)

Income taxes paid, net of refunds

 (1,321)

 (1,230)

Net cash flow from / (used in) operating activities

 (25,111)

 12,219

Cash flow from / (used in) investing activities

Purchase of subsidiaries, associates and intangible assets

 (1)

 0

Disposal of subsidiaries, associates and intangible assets

 35

 1,682

Purchase of property, equipment and software

 (947)

 (1,066)

Disposal of property, equipment and software

 33

 9

Net (purchase) / redemption of financial assets measured at fair value through other comprehensive income

 25

 (724)

Purchase of debt securities measured at amortized cost

 (11,632)

 (16,881)

Disposal and redemption of debt securities measured at amortized cost

 7,227

 8,653

Net cash flow from / (used in) investing activities

 (5,260)

 (8,329)

Cash flow from / (used in) financing activities

Net issuance (repayment) of short-term debt measured at amortized cost

 6,658

 (16,249)

Distributions paid on UBS AG shares

 (6,000)

 (4,200)

Issuance of debt designated at fair value and long-term debt measured at amortized cost

2

 84,278

 68,812

Repayment of debt designated at fair value and long-term debt measured at amortized cost

2

 (65,547)

 (54,184)

Net cash flows from other financing activities

 (369)

 (460)

Net cash flow from / (used in) financing activities

 19,020

 (6,282)

Total cash flow

Cash and cash equivalents at the beginning of the period

 195,200

 207,755

Net cash flow from / (used in) operating, investing and financing activities

 (11,350)

 (2,391)

Effects of exchange rate differences on cash and cash equivalents

 (713)

 (15,773)

Cash and cash equivalents at the end of the period

3

 183,136

 189,592

of which: cash and balances at central banks

4

 161,640

 166,306

of which: amounts due from banks

4

 10,950

 13,354

of which: money market paper

4,5

 10,545

 9,932

Additional information

Net cash flow from / (used in) operating activities includes:

Interest received in cash

 23,579

 10,197

Interest paid in cash

 18,052

 5,120

Dividends on equity investments, investment funds and associates received in cash

6

 1,812

 1,556

1 Movements in this section exclude foreign currency translation and foreign exchange effects, which are presented within the Other net adjustments line. 2 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). 3 USD 3,360m

and USD 3,855m of cash and cash equivalents (mainly reflected in Amounts due from banks) were restricted as of 30 September 2023 and 30 September 2022, respectively. Refer to “Note 22 Restricted and

transferred financial assets” in the “Consolidated financial statements” section of the Annual Report 2022 for more information. 4 Includes only balances with an original maturity of three months or less. 5 Money

market paper is included on the balance sheet under Financial assets at fair value not held for trading (30 September 2023: USD 10,158m; 30 September 2022: USD 3,898m), Other financial assets measured at

amortized cost (30 September 2023: USD 187m; 30 September 2022: USD 5,943m), and Financial assets at fair value held for trading (30 September 2023: USD 199m; 30 September 2022: USD 91m). 6 Includes

dividends received from associates reported within Net cash flow from / (used in) investing activities.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 47

Notes to the UBS AG interim consolidated financial

statements (unaudited)

Note 1 Basis of accounting

Basis of preparation

The consolidated financial statements (the financial statements) of UBS AG and its subsidiaries (together, UBS AG)

are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International

Accounting Standards Board (the IASB), and are presented in US dollars. These interim financial statements are

prepared in accordance with IAS 34,

Interim Financial Reporting

.

In preparing these interim financial statements, the same accounting policies and methods of computation have

been applied as in the UBS AG consolidated annual financial statements for the period ended 31 December 2022,

except for the changes described in this Note. These interim financial statements are unaudited and should be read

in conjunction with UBS AG’s audited consolidated financial statements in the Annual Report 2022 and the

“Management report” sections of this report. In the opinion of management, all necessary adjustments have been

made for a fair presentation of UBS AG’s financial position, results of operations and cash flows. 

Preparation of these interim financial statements requires management to make estimates and assumptions that

affect the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and

liabilities. These estimates and assumptions are based on the best available information. Actual results in the future

could differ from such estimates and differences may be material to the financial statements. Revisions to estimates,

based on regular reviews, are recognized in the period in which they occur. For more information about areas of

estimation uncertainty that are considered to require critical judgment, refer to “Note 1a Material accounting

policies” in the “Consolidated financial statements” section of the Annual Report 2022.

IFRS 17,

Insurance Contracts

Effective from 1 January 2023, UBS AG has adopted IFRS 17,

Insurance Contracts

, which sets out the accounting

requirements for contractual rights and obligations that arise from insurance contracts issued and reinsurance

contracts held. The adoption has had no effect on UBS AG’s financial statements. UBS AG does not provide

insurance services in any market.

Other amendments to IFRS

Effective from 1 January 2023, UBS AG has adopted a number of minor amendments to IFRS, which have had no

significant effect on UBS AG.

Amendments to IAS 12,

Income Taxes

In May 2023, the IASB issued amendments to IAS 12,

Income Taxes

, whereby, under an exception, deferred tax

assets (DTAs) and deferred tax liabilities (DTLs) will not be recognized in respect of top-up tax on income under the

Global Anti-Base Erosion Rules that is imposed under tax law that is enacted or substantively enacted to implement

the Pillar Two model rules published by the Organisation for Economic Co-operation and Development. This

exception applies immediately upon the issuance of the amendments and it is, therefore, potentially relevant to

these financial statements and subsequent financial statements. Although countries are starting to implement the

rules, UBS AG did not have any DTAs or DTLs on 30 September 2023 that had not been recognized as a result of

the application of this exception. The exception is expected to be removed by the IASB in due course, although the

timing of that has not been specified. The amendments also introduced new disclosure requirements in relation to

top-up tax, which will first apply to UBS AG’s financial statements for the year ended 31 December 2023.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 48

Note 1 Basis of accounting (continued)

Currency translation rates

The following table shows the rates of the main currencies used to translate the financial information of UBS AG’s

operations with a functional currency other than the US dollar into US dollars.

Closing exchange rate

Average rate

1

As of

For the quarter ended

Year-to-date

30.9.23

30.6.23

31.12.22

30.9.22

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

1 CHF

 1.09

 1.12

 1.08

 1.01

 1.12

 1.11

 1.03

 1.11

 1.05

1 EUR

 1.06

 1.09

 1.07

 0.98

 1.08

 1.09

 0.99

 1.08

 1.05

1 GBP

 1.22

 1.27

 1.21

 1.12

 1.26

 1.24

 1.16

 1.24

 1.24

100 JPY

 0.67

 0.69

 0.76

 0.69

 0.69

 0.71

 0.72

 0.72

 0.78

1 Monthly income statement items of operations with a functional currency other than the US dollar are translated into US dollars using month-end rates. Disclosed average rates for a quarter represent an average of

three month-end rates, weighted according to the income and expense volumes of all operations of UBS AG with the same functional currency for each month. Weighted average rates for individual business divisions

may deviate from the weighted average rates for UBS AG.

Note 2 Segment reporting

USD m

Global Wealth

Management

Personal &

Corporate

Banking

Asset 

Management

Investment

Bank

Non-core and

Legacy

1

Group 

Items

1

UBS AG

For the nine months ended 30 September 2023

2

Net interest income

 4,235

 2,327

 (27)

 (1,844)

 23

 (1,037)

 3,678

Non-interest income

 9,975

 1,782

 1,539

 7,848

 64

 775

 21,983

Total revenues

 14,210

 4,110

 1,512

 6,004

 87

 (262)

 25,661

Credit loss expense / (release)

 29

 27

 (1)

 25

 (1)

 1

 80

Operating expenses

 10,872

 2,118

 1,243

 5,480

 861

 819

 21,393

Operating profit / (loss) before tax

 3,309

 1,965

 270

 500

 (774)

 (1,082)

 4,188

Tax expense / (benefit)

 1,115

Net profit / (loss)

 3,072

As of 30 September 2023

2

Total assets

 359,657

 237,396

 17,909

 370,306

 13,573

 98,693

 1,097,536

USD m

Global Wealth

Management

Personal &

Corporate

Banking

Asset 

Management

Investment

Bank

Non-core and

Legacy

1

Group

Items

1

UBS AG

For the nine months ended 30 September 2022

2

Net interest income

 3,775

 1,559

 (12)

 (1)

 (2)

 (372)

 4,946

Non-interest income

 10,588

 1,616

 2,478

 7,033

 187

 (9)

 21,892

Total revenues

 14,363

 3,175

 2,466

 7,031

 184

 (382)

 26,838

Credit loss expense / (release)

 (3)

 42

 0

 (20)

 2

 0

 22

Operating expenses

 10,518

 1,867

 1,192

 5,320

 84

 664

 19,644

Operating profit / (loss) before tax

 3,847

 1,266

 1,274

 1,731

 98

 (1,045)

 7,171

Tax expense / (benefit)

 1,577

Net profit / (loss)

 5,594

As of 31 December 2022

2

Total assets

 388,624

 235,330

 16,971

 391,495

 13,367

 59,649

 1,105,436

1 Starting with the third quarter of 2023, Non-core and Legacy (previously reported within Group Functions) represents a separate reportable segment and Group Functions has been renamed Group Items. Prior

periods have been revised to reflect these presentational changes. 2 Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group“ in the “Consolidated financial statements“ section of the UBS Group

third quarter 2023 report about UBS AG’s reporting segments.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 49

Note 3 Net interest income

For the quarter ended

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Interest income from loans and deposits

1

 5,279

 4,804

 2,523

 14,228

 6,071

Interest income from securities financing transactions measured at amortized cost

2

 894

 833

 415

 2,492

 742

Interest income from other financial instruments measured at amortized cost

 291

 276

 148

 826

 338

Interest income from debt instruments measured at fair value through other comprehensive income

 27

 26

 12

 75

 60

Interest income from derivative instruments designated as cash flow hedges 

 (517)

 (457)

 (17)

 (1,350)

 396

Total interest income from financial instruments measured at amortized cost and fair value through other comprehensive income

 5,974

 5,483

 3,081

 16,272

 7,607

Interest expense on loans and deposits

3

 4,090

 3,452

 1,226

 10,451

 2,272

Interest expense on securities financing transactions measured at amortized cost

4

 454

 474

 282

 1,293

 794

Interest expense on debt issued

 788

 656

 265

 2,000

 576

Interest expense on lease liabilities

 24

 25

 21

 74

 64

Total interest expense from financial instruments measured at amortized cost

 5,357

 4,607

 1,794

 13,818

 3,706

Total net interest income from financial instruments measured at amortized cost and fair value through other comprehensive

income

 617

 876

 1,287

 2,454

 3,901

Net interest income from financial instruments measured at fair value through profit or loss and other

 368

 430

 278

 1,224

 1,045

Total net interest income

 984

 1,305

 1,565

 3,678

 4,946

1 Consists of interest income from cash and balances at central banks, loans and advances to 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. 2 Includes interest income on receivables from securities financing transactions and negative interest, including fees, on

payables from securities financing transactions. 3 Consists of interest expense on amounts due to banks, cash collateral payables on derivative instruments, customer deposits, and funding from UBS Group AG, as

well as negative interest on cash and balances at central banks, loans and advances to banks, and cash collateral receivables on derivative instruments. 4 Includes interest expense on payables from securities financing

transactions and negative interest, including fees, on receivables from securities financing transactions.

Note 4 Net fee and commission income

For the quarter ended

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Underwriting fees

 143

 131

 188

 424

 512

M&A and corporate finance fees

 139

 156

 152

 474

 608

Brokerage fees

 784

 800

 780

 2,464

 2,728

Investment fund fees

 1,193

 1,179

 1,173

 3,550

 3,794

Portfolio management and related services

 2,323

 2,254

 2,178

 6,787

 6,938

Other

 515

 487

 500

 1,482

 1,494

Total fee and commission income

1

 5,097

 5,008

 4,971

 15,180

 16,074

of which: recurring

 3,573

 3,496

 3,453

 10,483

 10,905

of which: transaction-based

 1,512

 1,504

 1,504

 4,655

 5,126

of which: performance-based

 11

 7

 14

 42

 43

Fee and commission expense

 431

 419

 476

 1,297

 1,410

Net fee and commission income

 4,666

 4,589

 4,495

 13,883

 14,664

1 Reflects third-party fee and commission income for the third quarter of 2023 of USD 3,212m for Global Wealth Management (second quarter of 2023: USD 3,134m; third quarter of 2022: USD 3,106m), USD 466m

for Personal & Corporate Banking (second quarter of 2023: USD 465m; third quarter of 2022: USD 398m), USD 679m for Asset Management (second quarter of 2023: USD 673m; third quarter of 2022: USD 682m),

USD 735m for the Investment Bank (second quarter of 2023: USD 731m; third quarter of 2022: USD 782m), USD 0m for Group Items (second quarter of 2023: USD 4m; third quarter of 2022: USD 2m) and USD 5m

for Non-core and Legacy (second quarter of 2023: USD 0m; third quarter of 2022: USD 0m).

Note 5 Personnel expenses

For the quarter ended

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Salaries and variable compensation

1

 3,431

 3,364

 3,151

 10,151

 10,151

of which: variable compensation – financial advisors

2

 1,150

 1,110

 1,093

 3,372

 3,436

Contractors

 24

 24

 29

 74

 87

Social security

 216

 176

 179

 612

 571

Post-employment benefit plans

 133

 139

 122

 446

 442

Other personnel expenses

 147

 144

 136

 413

 361

Total personnel expenses

 3,951

 3,847

 3,617

 11,697

 11,613

1 Includes role-based allowances. 2 Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. It also includes expenses related to

compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 50

Note 6 General and administrative expenses

For the quarter ended

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Outsourcing costs

 117

 121

 109

 362

 331

Technology costs

 142

 128

 122

 403

 370

Consulting, legal and audit fees

 162

 160

 116

 430

 343

Real estate and logistics costs

 210

 134

 119

 462

 371

Market data services

 97

 101

 91

 297

 273

Marketing and communication

 46

 44

 45

 124

 119

Travel and entertainment

 44

 51

 39

 145

 101

Litigation, regulatory and similar matters

1

 8

 55

 21

 784

 298

Other

 1,760

 1,649

 1,416

 5,004

 4,467

of which: shared services costs charged by UBS Group AG or its subsidiaries

 1,563

 1,460

 1,237

 4,408

 3,975

Total general and administrative expenses

 2,585

 2,443

 2,077

 8,011

 6,674

1 Reflects the net increase in provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to Note 15b for more information.

Note 7 Expected credit loss measurement

a) Credit loss expense / release 

Total net credit loss expenses in the third quarter of 2023 were USD 27m, reflecting USD 20m net credit loss

expenses related to stage 1 and 2 positions and USD 6m net credit loss expenses related to stage 3 positions. 

Stage 1 and 2 net expenses included: scenario-related net expenses of USD 6m; net releases of USD 1m from model

changes, mainly in Global Wealth Management and the Investment Bank; and additional net expenses of USD 15m

from book quality and size changes.

Stage 3 net credit loss expenses were USD 6m, driven by net expenses of USD 15m in Global Wealth Management

and USD 7m in the Investment Bank, partly offset by net releases of USD 15m in Personal & Corporate Banking on

various corporate lending positions. 

Credit loss expense / (release)

USD m

Global 

Wealth 

Management

Personal & 

Corporate 

Banking

Asset

Management

Investment 

Bank

Non-core and

Legacy

1

Group 

Items

1

Total

For the quarter ended 30.9.23

Stages 1 and 2

 (7)

 16

 0

 10

 0

 1

 20

Stage 3

 15

 (15)

 0

 7

 (1)

 0

 6

Total credit loss expense / (release)

 8

 1

 0

 17

 (1)

 1

 27

For the quarter ended 30.6.23

Stages 1 and 2

 (4)

 (11)

 0

 5

 0

 0

 (10)

Stage 3

 9

 21

 0

 (4)

 0

 0

 26

Total credit loss expense / (release)

 5

 10

 0

 1

 0

 0

 16

For the quarter ended 30.9.22

Stages 1 and 2

 6

 (6)

 0

 4

 0

 0

 4

Stage 3

 1

 (9)

 0

 1

 0

 0

 (7)

Total credit loss expense / (release)

 7

 (15)

 0

 4

 0

 0

 (3)

1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed Group Items. Prior periods have been revised to reflect these changes.

b) Changes to ECL models, scenarios, scenario weights and post-model adjustments

Scenarios and weights

The expected credit loss (ECL) scenarios, along with their related macroeconomic factors and market data, were

reviewed in light of the economic and political conditions prevailing in the third quarter of 2023 through a series

of governance meetings, with input and feedback from UBS Risk and Finance experts across the business divisions

and regions

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 51

Note 7 Expected credit loss measurement (continued)

The baseline scenario was updated with the latest macroeconomic forecasts as of 30 September 2023. The

assumptions on a calendar-year basis are included in the table below and imply a more optimistic outlook for the

US for the remainder of 2023 and 2024, while projections have become slightly more pessimistic for the Eurozone

and Switzerland. 

The mild debt crisis scenario, the stagflationary geopolitical crisis scenario and the asset price inflation scenario were

updated based on the latest market data, but the assumptions remain broadly unchanged. UBS kept scenarios and

scenario weights in line with those applied in the second quarter of 2023. Refer to the table below.

At the beginning of the second quarter of 2023, UBS replaced the global crisis scenario applied at year-end 2022

and at the end of the first quarter of 2023 with the mild debt crisis scenario. 

Post-model adjustments

Total stage 1 and 2 allowances and provisions amounted to USD 561m as of 30 September 2023 and included

post-model adjustments of USD 125m (30 June 2023: USD 131m). Overlays are to cover for uncertainty levels,

including the geopolitical situation. 

Comparison of shock factors

Baseline

Key parameters

2022

2023

2024

Real GDP growth (annual percentage change)

US 

 1.9

 2.1

 0.5

Eurozone

 3.4

 0.5

 0.7

Switzerland

 2.7

 0.7

 0.9

Unemployment rate (%, annual average)

US 

 3.6

 3.6

 4.9

Eurozone

 6.7

 6.6

 6.9

Switzerland

 2.2

 2.0

 2.3

Fixed income: 10-year government bonds (%, Q4)

USD

 3.9

 4.6

 4.5

EUR

 2.6

 2.8

 2.8

CHF

 1.6

 1.1

 1.1

Real estate (annual percentage change, Q4)

US 

 7.5

 1.2

 0.5

Eurozone

 2.9

 (3.2)

 1.7

Switzerland

 3.9

 0.5

 (1.0)

Economic scenarios and weights applied

Assigned weights in %

ECL scenario

30.9.23

30.6.23

30.9.22

Asset price inflation

 0.0

 0.0

 0.0

Baseline

 60.0

 60.0

 55.0

Severe Russia–Ukraine conflict scenario

–

–

 25.0

Mild debt crisis 

 15.0

 15.0

–

Stagflationary geopolitical crisis

 25.0

 25.0

–

Global crisis

–

–

 20.0

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 52

Note 7 Expected credit loss measurement (continued)

c) ECL-relevant balance sheet and off-balance sheet positions including ECL allowances and provisions

The following tables provide information about financial instruments and certain non-financial instruments that are

subject to ECL requirements. For amortized-cost instruments, the carrying amount represents the maximum

exposure to credit risk, taking into account the allowance for credit losses. Financial assets measured at fair value

through other comprehensive income (FVOCI) are also subject to ECL; however, unlike amortized-cost instruments,

the allowance for credit losses for FVOCI instruments does not reduce the carrying amount of these financial assets.

Instead, the carrying amount of financial assets measured at FVOCI represents the maximum exposure to credit risk.

In addition to recognized financial assets, certain off-balance sheet financial instruments and other credit lines are

also subject to ECL. The maximum exposure to credit risk for off-balance sheet financial instruments is calculated

based on the maximum contractual amounts.

USD m

30.9.23

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

 161,720

 161,703

 17

 0

 (24)

 0

 (24)

 0

Loans and advances to banks

2

 20,151

 20,091

 60

 0

 (6)

 (6)

 0

 0

Receivables from securities financing transactions

 61,284

 61,284

 0

 0

 (1)

 (1)

 0

 0

Cash collateral receivables on derivative instruments

 36,302

 36,302

 0

 0

 0

 0

 0

 0

Loans and advances to customers

 386,315

 366,801

 17,684

 1,829

 (849)

 (172)

 (181)

 (496)

of which: Private clients with mortgages

 162,044

 151,836

 9,426

 783

 (155)

 (42)

 (90)

 (23)

of which: Real estate financing

 50,303

 46,340

 3,947

 16

 (45)

 (21)

 (24)

 0

of which: Large corporate clients

 13,119

 11,190

 1,418

 511

 (190)

 (32)

 (30)

 (128)

of which: SME clients

 12,088

 10,163

 1,530

 395

 (231)

 (32)

 (23)

 (175)

of which: Lombard

 118,660

 118,621

 0

 39

 (22)

 (6)

 0

 (16)

of which: Credit cards

 1,905

 1,462

 408

 35

 (38)

 (6)

 (10)

 (21)

of which: Commodity trade finance

 2,861

 2,838

 11

 12

 (110)

 (6)

 0

 (103)

Other financial assets measured at amortized cost

 52,923

 52,411

 372

 140

 (86)

 (15)

 (6)

 (64)

of which: Loans to financial advisors

 2,582

 2,332

 134

 116

 (54)

 (4)

 (2)

 (48)

Total financial assets measured at amortized cost

 718,693

 698,590

 18,134

 1,969

 (966)

 (194)

 (211)

 (560)

Financial assets measured at fair value through other comprehensive income

 2,213

 2,213

 0

 0

 0

 0

 0

 0

Total on-balance sheet financial assets in scope of ECL requirements

 720,906

 700,804

 18,134

 1,969

 (966)

 (194)

 (211)

 (560)

Total 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

 24,590

 23,577

 889

 124

 (38)

 (12)

 (7)

 (19)

of which: Large corporate clients

 3,286

 2,608

 587

 91

 (4)

 (2)

 (2)

 0

of which: SME clients

 1,371

 1,141

 197

 32

 (14)

 (1)

 (1)

 (12)

of which: Financial intermediaries and hedge funds 

 15,516

 15,467

 48

 0

 (11)

 (8)

 (3)

 0

of which: Lombard

 1,995

 1,995

 0

 0

 (1)

 0

 0

 (1)

of which: Commodity trade finance

 1,668

 1,661

 7

 0

 (1)

 (1)

 0

 0

Irrevocable loan commitments

 42,309

 40,287

 1,951

 70

 (91)

 (52)

 (37)

 (1)

of which: Large corporate clients

 24,149

 22,446

 1,656

 46

 (77)

 (43)

 (33)

 (1)

Forward starting reverse repurchase and securities borrowing agreements

 10,431

 10,431

 0

 0

 0

 0

 0

 0

Unconditionally revocable loan commitments

 42,589

 40,849

 1,689

 51

 (44)

 (35)

 (9)

 0

of which: Real estate financing

 8,486

 8,098

 389

 0

 (6)

 (6)

 0

 0

of which: Large corporate clients

 4,651

 4,459

 185

 7

 (5)

 (3)

 (2)

 0

of which: SME clients

 4,897

 4,704

 165

 28

 (19)

 (16)

 (3)

 0

of which: Lombard

 7,465

 7,464

 0

 1

 0

 0

 0

 0

of which: Credit cards

 9,654

 9,183

 467

 4

 (6)

 (4)

 (2)

 0

of which: Commodity trade finance

 564

 564

 0

 0

 0

 0

 0

 0

Irrevocable committed prolongation of existing loans

 3,245

 3,225

 17

 3

 (3)

 (3)

 0

 0

Total off-balance sheet financial instruments and other credit lines

 123,164

 118,369

 4,546

 249

 (176)

 (102)

 (53)

 (21)

Total allowances and provisions

 (1,142)

 (297)

 (265)

 (581)

1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes USD 7.6bn against Credit Suisse AG.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 53

Note 7 Expected credit loss measurement (continued)

USD m

30.6.23

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

 159,425

 159,393

 32

 0

 (10)

 0

 (10)

 0

Loans and advances to banks

2

 21,395

 21,239

 157

 0

 (6)

 (5)

 (1)

 0

Receivables from securities financing transactions

 61,977

 61,977

 0

 0

 (1)

 (1)

 0

 0

Cash collateral receivables on derivative instruments

 35,068

 35,068

 0

 0

 0

 0

 0

 0

Loans and advances to customers

 397,596

 378,647

 17,204

 1,746

 (859)

 (182)

 (173)

 (504)

of which: Private clients with mortgages

 163,560

 153,443

 9,358

 758

 (154)

 (44)

 (87)

 (23)

of which: Real estate financing

 50,054

 45,959

 4,088

 7

 (44)

 (21)

 (23)

 0

of which: Large corporate clients

 13,444

 11,792

 1,292

 359

 (179)

 (37)

 (29)

 (113)

of which: SME clients

 12,482

 10,776

 1,293

 413

 (256)

 (32)

 (21)

 (203)

of which: Lombard

 124,511

 124,469

 0

 42

 (26)

 (9)

 0

 (17)

of which: Credit cards

 1,939

 1,502

 403

 34

 (39)

 (8)

 (11)

 (21)

of which: Commodity trade finance

 2,193

 2,179

 0

 15

 (110)

 (7)

 0

 (104)

Other financial assets measured at amortized cost

 52,180

 51,650

 377

 153

 (84)

 (16)

 (7)

 (62)

of which: Loans to financial advisors

 2,588

 2,287

 174

 126

 (55)

 (6)

 (2)

 (47)

Total financial assets measured at amortized cost

 727,642

 707,974

 17,770

 1,898

 (961)

 (205)

 (190)

 (566)

Financial assets measured at fair value through other comprehensive income

 2,217

 2,217

 0

 0

 0

 0

 0

 0

Total on-balance sheet financial assets in scope of ECL requirements

 729,859

 710,191

 17,770

 1,898

 (961)

 (205)

 (190)

 (566)

Total 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

 23,469

 22,430

 921

 118

 (37)

 (12)

 (7)

 (17)

of which: Large corporate clients

 3,367

 2,598

 690

 79

 (5)

 (2)

 (2)

 0

of which: SME clients

 1,423

 1,218

 167

 38

 (11)

 (1)

 (1)

 (9)

of which: Financial intermediaries and hedge funds 

 12,874

 12,859

 15

 0

 (11)

 (8)

 (3)

 0

of which: Lombard

 3,019

 3,019

 0

 1

 (1)

 0

 0

 (1)

of which: Commodity trade finance

 2,008

 2,008

 0

 0

 (1)

 (1)

 0

 0

Irrevocable loan commitments

 40,074

 37,920

 2,076

 78

 (93)

 (54)

 (38)

 (2)

of which: Large corporate clients

 23,220

 21,436

 1,731

 52

 (76)

 (44)

 (31)

 (2)

Forward starting reverse repurchase and securities borrowing agreements

 4,972

 4,972

 0

 0

 0

 0

 0

 0

Unconditionally revocable loan commitments

 44,716

 42,915

 1,739

 63

 (43)

 (34)

 (9)

 0

of which: Real estate financing

 8,929

 8,671

 258

 0

 (6)

 (6)

 0

 0

of which: Large corporate clients

 4,566

 4,401

 158

 7

 (6)

 (3)

 (3)

 0

of which: SME clients

 4,963

 4,743

 179

 40

 (19)

 (16)

 (3)

 0

of which: Lombard

 8,671

 8,670

 0

 1

 0

 0

 0

 0

of which: Credit cards

 9,762

 9,274

 484

 4

 (7)

 (6)

 (2)

 0

of which: Commodity trade finance

 534

 534

 0

 0

 0

 0

 0

 0

Irrevocable committed prolongation of existing loans

 3,811

 3,802

 7

 2

 (3)

 (2)

 0

 0

Total off-balance sheet financial instruments and other credit lines

 117,043

 112,039

 4,743

 261

 (175)

 (102)

 (54)

 (19)

Total allowances and provisions

 (1,136)

 (307)

 (244)

 (585)

1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes USD 7.8bn against Credit Suisse AG.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 54

Note 7 Expected credit loss measurement (continued)

USD m

31.12.22

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

 169,445

 169,402

 44

 0

 (12)

 0

 (12)

 0

Loans and advances to banks

 14,671

 14,670

 1

 0

 (6)

 (5)

 (1)

 0

Receivables from securities financing transactions

 67,814

 67,814

 0

 0

 (2)

 (2)

 0

 0

Cash collateral receivables on derivative instruments

 35,033

 35,033

 0

 0

 0

 0

 0

 0

Loans and advances to customers

 390,027

 372,903

 15,587

 1,538

 (783)

 (129)

 (180)

 (474)

of which: Private clients with mortgages

 156,930

 147,651

 8,579

 699

 (161)

 (27)

 (107)

 (28)

of which: Real estate financing

 46,470

 43,112

 3,349

 9

 (41)

 (17)

 (23)

 0

of which: Large corporate clients

 12,226

 10,733

 1,189

 303

 (130)

 (24)

 (14)

 (92)

of which: SME clients

 13,903

 12,211

 1,342

 351

 (251)

 (26)

 (22)

 (203)

of which: Lombard

 132,287

 132,196

 0

 91

 (26)

 (9)

 0

 (17)

of which: Credit cards

 1,834

 1,420

 382

 31

 (36)

 (7)

 (10)

 (19)

of which: Commodity trade finance

 3,272

 3,261

 0

 11

 (96)

 (6)

 0

 (90)

Other financial assets measured at amortized cost

 53,389

 52,829

 413

 147

 (86)

 (17)

 (6)

 (63)

of which: Loans to financial advisors

 2,611

 2,357

 128

 126

 (59)

 (7)

 (2)

 (51)

Total financial assets measured at amortized cost

 730,379

 712,651

 16,044

 1,685

 (890)

 (154)

 (199)

 (537)

Financial assets measured at fair value through other comprehensive income

 2,239

 2,239

 0

 0

 0

 0

 0

 0

Total on-balance sheet financial assets in scope of ECL requirements

 732,618

 714,889

 16,044

 1,685

 (890)

 (154)

 (199)

 (537)

Total 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

 22,167

 19,805

 2,254

 108

 (48)

 (13)

 (9)

 (26)

of which: Large corporate clients

 3,663

 2,883

 721

 58

 (26)

 (2)

 (3)

 (21)

of which: SME clients

 1,337

 1,124

 164

 49

 (5)

 (1)

 (1)

 (3)

of which: Financial intermediaries and hedge funds 

 11,833

 10,513

 1,320

 0

 (12)

 (8)

 (4)

 0

of which: Lombard

 2,376

 2,376

 0

 1

 (1)

 0

 0

 (1)

of which: Commodity trade finance

 2,121

 2,121

 0

 0

 (1)

 (1)

 0

 0

Irrevocable loan commitments

 39,996

 37,531

 2,341

 124

 (111)

 (59)

 (52)

 0

of which: Large corporate clients

 23,611

 21,488

 2,024

 99

 (93)

 (49)

 (45)

 0

Forward starting reverse repurchase and securities borrowing agreements

 3,801

 3,801

 0

 0

 0

 0

 0

 0

Unconditionally revocable loan commitments

 43,677

 41,809

 1,833

 36

 (40)

 (32)

 (8)

 0

of which: Real estate financing

 8,711

 8,528

 183

 0

 (6)

 (6)

 0

 0

of which: Large corporate clients

 4,578

 4,304

 268

 5

 (4)

 (1)

 (2)

 0

of which: SME clients

 4,723

 4,442

 256

 26

 (19)

 (16)

 (3)

 0

of which: Lombard

 7,855

 7,854

 0

 1

 0

 0

 0

 0

of which: Credit cards

 9,390

 8,900

 487

 3

 (7)

 (5)

 (2)

 0

of which: Commodity trade finance

 327

 327

 0

 0

 0

 0

 0

 0

Irrevocable committed prolongation of existing loans

 4,696

 4,600

 94

 2

 (2)

 (2)

 0

 0

Total off-balance sheet financial instruments and other credit lines

 114,337

 107,545

 6,522

 270

 (201)

 (106)

 (69)

 (26)

Total allowances and provisions

 (1,091)

 (260)

 (267)

 (564)

1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 55

Note 7 Expected credit loss measurement (continued)

The table below provides information about the ECL gross exposure and the ECL coverage ratio for UBS AG’s core

loan portfolios (i.e.,

Loans and advances to customers

and

 Loans to financial advisors

) and relevant off-balance

sheet exposures.

Cash and balances at central banks

,

Loans and advances to banks

,

Receivables from securities

financing transactions

,

Cash collateral receivables on derivative instruments

 and

Financial assets measured at fair

value through other comprehensive income

 are not included in the table below, due to their lower sensitivity to

ECL.

ECL coverage ratios are calculated by dividing ECL allowances and provisions by the gross carrying amount of the

related exposures.

Coverage ratios for core loan portfolio

30.9.23

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

 162,200

 151,878

 9,515

 806

 10

 3

 95

 8

 291

Real estate financing

 50,348

 46,361

 3,971

 16

 9

 5

 60

 9

 11

Total real estate lending

 212,547

 198,239

 13,486

 822

 9

 3

 84

 8

 286

Large corporate clients

 13,309

 11,222

 1,448

 639

 143

 29

 204

 49

 2,007

SME clients

 12,319

 10,195

 1,553

 571

 187

 31

 150

 47

 3,071

Total corporate lending

 25,628

 21,417

 3,001

 1,210

 164

 30

 176

 48

 2,509

Lombard

 118,682

 118,626

 0

 56

 2

 0

 0

 0

 2,953

Credit cards

 1,942

 1,468

 418

 56

 195

 41

 251

 87

 3,808

Commodity trade finance

 2,971

 2,845

 11

 115

 369

 23

 60

 23

 8,960

Other loans and advances to customers

 25,394

 24,378

 949

 67

 23

 11

 43

 12

 4,233

Loans to financial advisors

 2,636

 2,336

 136

 164

 206

 19

 142

 25

 2,925

Total other lending

 151,625

 149,653

 1,514

 457

 19

 3

 110

 4

 4,744

Total

1

 389,800

 369,309

 18,001

 2,490

 23

 5

 102

 9

 2,185

Gross 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

 5,707

 5,444

 249

 14

 9

 7

 37

 9

 26

Real estate financing

 10,152

 9,743

 409

 0

 7

 8

 0

 7

 0

Total real estate lending

 15,859

 15,187

 658

 14

 8

 8

 5

 8

 26

Large corporate clients

 32,193

 29,621

 2,428

 144

 27

 16

 151

 27

 107

SME clients

 7,166

 6,626

 464

 75

 55

 29

 181

 39

 1,563

Total corporate lending

 39,359

 36,247

 2,893

 219

 32

 19

 156

 29

 607

Lombard

 11,006

 11,005

 0

 1

 1

 1

 0

 1

 0

Credit cards

 9,654

 9,183

 467

 4

 6

 5

 36

 6

 0

Commodity trade finance

 2,236

 2,229

 7

 0

 4

 4

 41

 4

 0

Financial intermediaries and hedge funds

 17,917

 17,685

 232

 0

 7

 5

 149

 7

 0

Other off-balance sheet commitments

 16,703

 16,401

 291

 11

 10

 5

 91

 6

 0

Total other lending

 57,515

 56,504

 996

 16

 6

 4

 78

 5

 0

Total

2

 112,733

 107,938

 4,546

 249

 16

 9

 117

 14

 835

Total on- and off-balance sheet

3

 502,533

 477,247

 22,548

 2,738

 21

 6

 105

 10

 2,063

1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other assets measured at amortized cost. 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).

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 56

Note 7 Expected credit loss measurement (continued)

Coverage ratios for core loan portfolio

30.6.23

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

 163,714

 153,488

 9,445

 781

 9

 3

 92

 8

 298

Real estate financing

 50,098

 45,980

 4,111

 7

 9

 5

 55

 9

 26

Total real estate lending

 213,812

 199,468

 13,556

 788

 9

 3

 80

 8

 296

Large corporate clients

 13,622

 11,829

 1,320

 472

 131

 31

 217

 50

 2,391

SME clients

 12,737

 10,808

 1,313

 616

 201

 29

 157

 43

 3,298

Total corporate lending

 26,360

 22,637

 2,634

 1,089

 165

 30

 187

 47

 2,904

Lombard

 124,537

 124,478

 0

 59

 2

 1

 0

 1

 2,873

Credit cards

 1,978

 1,510

 413

 55

 199

 53

 255

 97

 3,821

Commodity trade finance

 2,304

 2,185

 0

 118

 479

 30

 351

 30

 8,770

Other loans and advances to customers

 29,466

 28,550

 773

 142

 17

 9

 47

 10

 1,642

Loans to financial advisors

 2,643

 2,293

 177

 173

 208

 24

 140

 33

 2,707

Total other lending

 160,927

 159,017

 1,363

 547

 18

 3

 122

 4

 3,872

Total

1

 401,098

 381,122

 17,553

 2,423

 23

 5

 100

 9

 2,275

Gross 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

 6,406

 6,072

 324

 11

 6

 5

 22

 6

 60

Real estate financing

 9,757

 9,477

 280

 0

 6

 8

 0

 6

 0

Total real estate lending

 16,163

 15,549

 603

 11

 6

 7

 0

 6

 60

Large corporate clients

 31,238

 28,520

 2,580

 138

 28

 17

 141

 28

 132

SME clients

 7,309

 6,814

 400

 95

 53

 28

 257

 41

 994

Total corporate lending

 38,547

 35,334

 2,980

 233

 33

 19

 156

 30

 482

Lombard

 13,912

 13,910

 0

 1

 1

 1

 0

 1

 0

Credit cards

 9,762

 9,274

 484

 4

 7

 6

 37

 8

 0

Commodity trade finance

 2,555

 2,555

 0

 0

 2

 2

 0

 2

 0

Financial intermediaries and hedge funds

 18,519

 18,139

 380

 0

 7

 5

 90

 7

 0

Other off-balance sheet commitments

 12,613

 12,306

 296

 11

 14

 6

 95

 8

 0

Total other lending

 57,361

 56,184

 1,160

 17

 7

 4

 69

 5

 0

Total

2

 112,071

 107,067

 4,743

 261

 16

 10

 114

 14

 737

Total on- and off-balance sheet

3

 513,169

 488,189

 22,296

 2,684

 21

 6

 103

 10

 2,125

1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other assets measured at amortized cost. 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).

Coverage ratios for core loan portfolio

31.12.22

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

 157,091

 147,678

 8,686

 727

 10

 2

 123

 9

 381

Real estate financing

 46,511

 43,129

 3,372

 9

 9

 4

 70

 9

 232

Total real estate lending

 203,602

 190,807

 12,059

 736

 10

 2

 108

 9

 379

Large corporate clients

 12,356

 10,757

 1,204

 395

 105

 22

 120

 32

 2,325

SME clients

 14,154

 12,237

 1,364

 553

 177

 22

 161

 36

 3,664

Total corporate lending

 26,510

 22,994

 2,567

 949

 144

 22

 142

 34

 3,106

Lombard

 132,313

 132,205

 0

 108

 2

 1

 0

 1

 1,580

Credit cards

 1,869

 1,427

 393

 50

 190

 46

 256

 91

 3,779

Commodity trade finance

 3,367

 3,266

 0

 101

 285

 18

 0

 18

 8,901

Other loans and advances to customers

 23,149

 22,333

 748

 68

 18

 6

 38

 7

 3,769

Loans to financial advisors

 2,670

 2,364

 130

 176

 221

 28

 124

 33

 2,870

Total other lending

 163,368

 161,595

 1,270

 503

 16

 3

 114

 3

 4,016

Total

1

 393,480

 375,396

 15,896

 2,188

 21

 4

 114

 8

 2,398

Gross 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

 6,535

 6,296

 236

 3

 5

 4

 18

 4

 1,183

Real estate financing

 10,054

 9,779

 275

 0

 6

 7

 0

 6

 0

Total real estate lending

 16,589

 16,075

 511

 3

 6

 6

 2

 6

 1,288

Large corporate clients

 32,126

 28,950

 3,013

 163

 38

 18

 165

 32

 1,263

SME clients

 7,122

 6,525

 499

 98

 47

 30

 214

 43

 304

Total corporate lending

 39,247

 35,475

 3,513

 260

 40

 20

 172

 34

 903

Lombard

 12,919

 12,918

 0

 1

 2

 1

 0

 1

 0

Credit cards

 9,390

 8,900

 487

 3

 7

 5

 36

 7

 0

Commodity trade finance

 2,459

 2,459

 0

 0

 3

 3

 0

 3

 0

Financial intermediaries and hedge funds

 18,128

 16,464

 1,664

 0

 7

 6

 25

 7

 0

Other off-balance sheet commitments

 11,803

 11,454

 346

 3

 11

 8

 68

 9

 0

Total other lending

 54,700

 52,195

 2,498

 7

 6

 5

 33

 6

 0

Total

2

 110,537

 103,745

 6,522

 270

 18

 10

 106

 16

 980

Total on- and off-balance sheet

3

 504,016

 479,140

 22,418

 2,458

 21

 5

 112

 10

 2,242

1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other assets measured at amortized cost. 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).

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 57

Note 8 Fair value measurement

a) Fair value hierarchy

The fair value hierarchy classification of financial and non-financial assets and liabilities measured at fair value is

summarized in the table below.

During the first nine months of 2023, assets and liabilities that were transferred from Level 2 to Level 1, or from

Level 1 to Level 2, and were held for the entire reporting period were not material.

Determination of fair values from quoted market prices or valuation techniques

1

30.9.23

30.6.23

31.12.22

USD m

Level 1

Level 2

Level 3

Total

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

 100,111

 15,586

 1,967

 117,664

 104,834

 13,871

 1,527

 120,232

 96,263

 10,284

 1,488

 108,034

of which: Equity instruments

 84,831

 395

 117

 85,342

 90,318

 453

 130

 90,901

 83,095

 789

 126

 84,010

of which: Government bills / bonds

 7,986

 2,069

 20

 10,074

 7,500

 2,119

 12

 9,631

 5,496

 950

 18

 6,464

of which: Investment fund units

 6,316

 781

 8

 7,105

 6,123

 726

 10

 6,859

 6,673

 596

 61

 7,330

of which: Corporate and municipal bonds

 974

 10,219

 656

 11,849

 889

 9,531

 438

 10,859

 976

 6,509

 541

 8,026

of which: Loans

 0

 2,029

 1,063

 3,092

 0

 941

 821

 1,763

 0

 1,179

 628

 1,807

of which: Asset-backed securities

 4

 94

 102

 200

 4

 101

 115

 220

 22

 261

 114

 397

Derivative financial instruments

 1,049

 132,515

 1,452

 135,016

 1,042

 121,686

 1,318

 124,046

 769

 147,876

 1,464

 150,109

of which: Foreign exchange 

 650

 67,304

 0

 67,954

 551

 58,332

 5

 58,889

 575

 84,882

 2

 85,459

of which: Interest rate 

 0

 40,753

 571

 41,324

 0

 38,982

 492

 39,474

 0

 39,345

 460

 39,805

of which: Equity / index 

 1

 21,799

 487

 22,287

 0

 21,944

 433

 22,378

 1

 21,542

 653

 22,195

of which: Credit

 0

 968

 372

 1,340

 0

 1,001

 361

 1,362

 0

 719

 318

 1,038

of which: Commodities

 0

 1,602

 22

 1,623

 0

 1,371

 24

 1,394

 0

 1,334

 30

 1,365

Brokerage receivables

 0

 24,431

 0

 24,431

 0

 21,218

 0

 21,218

 0

 17,576

 0

 17,576

Financial assets at fair value not held for trading

 31,452

 27,191

 3,995

 62,638

 31,296

 28,577

 3,841

 63,714

 26,572

 29,110

 3,725

 59,408

of which: Financial assets for unit-linked

investment contracts

 13,966

 0

 0

 13,966

 14,740

 164

 0

 14,904

 13,071

 1

 0

 13,072

of which: Corporate and municipal bonds

 60

 12,024

 222

 12,306

 61

 11,730

 236

 12,026

 35

 14,101

 230

 14,366

of which: Government bills / bonds

 17,082

 3,324

 0

 20,406

 16,144

 3,976

 0

 20,120

 13,103

 3,638

 0

 16,741

of which: Loans

 0

 3,531

 1,113

 4,644

 0

 3,766

 819

 4,585

 0

 3,602

 736

 4,337

of which: Securities financing transactions

 0

 8,076

 104

 8,180

 0

 8,751

 105

 8,856

 0

 7,590

 114

 7,704

of which: Auction rate securities

 0

 0

 1,212

 1,212

 0

 0

 1,321

 1,321

 0

 0

 1,326

 1,326

of which: Investment fund units

 320

 217

 192

 729

 321

 190

 210

 720

 307

 178

 190

 675

of which: Equity instruments

 24

 0

 990

 1,014

 29

 0

 990

 1,020

 57

 0

 792

 849

Financial assets measured at fair value through other comprehensive income on a recurring basis

Financial assets measured at fair value through

other comprehensive income

 64

 2,149

 0

 2,213

 65

 2,152

 0

 2,217

 57

 2,182

 0

 2,239

of which: Commercial paper and certificates of

deposit

 0

 1,927

 0

 1,927

 0

 1,926

 0

 1,926

 0

 1,878

 0

 1,878

of which: Corporate and municipal bonds

 64

 193

 0

 257

 65

 217

 0

 282

 57

 278

 0

 335

Non-financial assets measured at fair value on a recurring basis

Precious metals and other physical commodities

 4,312

 0

 0

 4,312

 4,426

 0

 0

 4,426

 4,471

 0

 0

 4,471

Non-financial assets measured at fair value on a non-recurring basis

Other non-financial assets

2

 0

 0

 14

 14

 0

 0

 16

 16

 0

 0

 21

 21

Total assets measured at fair value

 136,988

 201,873

 7,428

 346,289

 141,663

 187,505

 6,701

 335,870

 128,132

 207,028

 6,698

 341,858

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 58

Note 8 Fair value measurement (continued)

Determination of fair values from quoted market prices or valuation techniques (continued)

1

30.9.23

30.6.23

31.12.22

USD m

Level 1

Level 2

Level 3

Total

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

26,219

5,673

98

31,990

29,147

6,330

139

35,616

23,578

5,823

114

29,515

of which: Equity instruments

 17,323

 247

 74

 17,643

 20,572

 303

 73

 20,947

 16,521

 352

 78

 16,951

of which: Corporate and municipal bonds

 33

 4,671

 19

 4,724

 31

 5,217

 61

 5,308

 36

 4,643

 27

 4,707

of which: Government bills / bonds

 7,875

 638

 0

 8,512

 7,487

 737

 0

 8,224

 5,880

 706

 1

 6,587

of which: Investment fund units

 989

 73

 3

 1,064

 1,057

 45

 3

 1,106

 1,141

 84

 3

 1,229

Derivative financial instruments

1,097

130,503

1,778

133,377

974

124,250

2,144

127,367

640

152,582

1,684

154,906

of which: Foreign exchange 

 709

 64,561

 16

 65,287

 565

 59,112

 40

 59,718

 587

 87,897

 24

 88,508

of which: Interest rate 

 0

 39,770

 146

 39,916

 0

 37,861

 133

 37,994

 0

 37,429

 116

 37,545

of which: Equity / index 

 0

 23,364

 1,328

 24,692

 0

 24,398

 1,665

 26,064

 0

 24,963

 1,184

 26,148

of which: Credit

 0

 1,125

 249

 1,375

 0

 1,267

 260

 1,527

 0

 920

 279

 1,199

of which: Commodities

 0

 1,511

 18

 1,529

 0

 1,511

 30

 1,541

 0

 1,309

 52

 1,361

Financial liabilities designated at fair value on a recurring basis

Brokerage payables designated at fair value

0

40,982

0

40,982

0

43,357

0

43,357

0

45,085

0

45,085

Debt issued designated at fair value

0

73,787

9,814

83,601

0

68,909

9,832

78,741

0

62,603

9,240

71,842

Other financial liabilities designated at fair value

0

27,949

2,062

30,011

0

29,204

2,221

31,425

0

30,055

1,978

32,033

of which: Financial liabilities related to unit-linked

investment contracts

 0

 14,109

 0

 14,109

 0

 15,055

 0

 15,055

 0

 13,221

 0

 13,221

of which: Securities financing transactions

 0

 11,433

 1

 11,434

 0

 11,344

 0

 11,344

 0

 15,333

 0

 15,333

of which: Funding from UBS Group AG

 0

 943

 1,248

 2,191

 0

 979

 1,320

 2,299

 0

 508

 1,287

 1,796

of which: Over-the-counter debt instruments and

others

 0

 1,463

 814

 2,277

 0

 1,826

 901

 2,727

 0

 993

 691

 1,684

Total liabilities measured at fair value

27,317

278,893

13,752

319,962

30,121

272,049

14,336

316,506

24,219

296,148

13,015

333,382

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. 

b) Valuation adjustments

The table below summarizes the changes in deferred day-1 profit or loss reserves during the relevant period. 

Deferred day-1 profit or loss is generally released into

Other net income from financial instruments measured at fair

value through profit or loss

when the pricing of equivalent products or the underlying parameters become

observable or when the transaction is closed out.

Deferred day-1 profit or loss reserves

For the quarter ended

Year-to-date

USD m

30.9.23

30.6.23

30.9.22

30.9.23

30.9.22

Reserve balance at the beginning of the period

 396

 399

 451

 422

 418

Profit / (loss) deferred on new transactions

 34

 71

 84

 196

 245

(Profit) / loss recognized in the income statement

 (39)

 (75)

 (108)

 (227)

 (235)

Foreign currency translation

 (1)

 (1)

 (1)

 (1)

 (2)

Reserve balance at the end of the period

 390

 396

 426

 390

 426

The table below summarizes other valuation adjustment reserves recognized on the balance sheet.

Other valuation adjustment reserves on the balance sheet

As of

USD m

30.9.23

30.6.23

31.12.22

Own credit adjustments on financial liabilities designated at fair value

 92

 405

 556

of which: debt issued designated at fair value

 21

 115

 289

of which: other financial liabilities designated at fair value

 72

 290

 266

Credit valuation adjustments

1

 (30)

 (34)

 (33)

Funding and debit valuation adjustments

 (74)

 (98)

 (46)

Other valuation adjustments

 (714)

 (726)

 (839)

of which: liquidity

 (272)

 (275)

 (311)

of which: model uncertainty

 (442)

 (451)

 (529)

1 Amount does not include reserves against defaulted counterparties.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 59

Note 8 Fair value measurement (continued)

c) 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, as well as the inputs used in a given valuation technique that are considered significant as of

30 September 2023 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 significant unobservable inputs disclosed in the table below are consistent with those included in “Note 20 Fair

value measurement” in the “Consolidated financial statements” section of the Annual Report 2022.

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)

30.9.23

31.12.22

USD bn

30.9.23

31.12.22

30.9.23

31.12.22

low

high

weighted

average

2

low

high

weighted

average

2

unit

1

Financial assets and liabilities at fair value held for trading and Financial assets at fair value not held for trading

Corporate and municipal

bonds

0.9

0.8

0.0

0.0

Relative value to

market comparable

Bond price equivalent

4

99

72

14

112

85

points

Discounted expected

cash flows

Discount margin

374

374

412

412

basis

points

Traded loans, loans

measured at fair value, loan

commitments and

guarantees

2.3

1.7

0.0

0.0

Relative value to

market comparable

Loan price equivalent

6

100

99

30

100

97

points

Discounted expected

cash flows

Credit spread

200

275

252

200

200

200

basis

points

Market comparable

and securitization

model

Credit spread

152

1,763

326

145

1,350

322

basis

points

Auction rate securities

1.2

1.3

Discounted expected

cash flows

Credit spread

135

208

150

115

196

144

basis

points

Investment fund units

3

0.2

0.3

0.0

0.0

Relative value to

market comparable

Net asset value

Equity instruments

3

1.1

0.9

0.1

0.1

Relative value to

market comparable

Price

Debt issued designated at

fair value

4

9.8

9.2

Other financial liabilities

designated at fair value

2.1

2.0

Discounted expected

cash flows

Funding spread

25

175

23

175

basis

points

Derivative financial instruments

Interest rate

0.6

0.5

0.1

0.1

Option model

Volatility of interest rates

80

124

75

143

basis

points

Credit

0.4

0.3

0.2

0.3

Discounted expected

cash flows

Credit spreads 

9

189

9

565

basis

points

Bond price equivalent

3

223

3

277

points

Equity / index

0.5

0.7

1.3

1.2

Option model

Equity dividend yields

0

9

0

20

%

Volatility of equity stocks,

equity and other indices

4

125

4

120

%

Equity-to-FX correlation

 (40)

70

 (29)

84

%

Equity-to-equity

correlation

 (25)

100

 (25)

100

%

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 Other financial

liabilities designated at fair value and Derivative financial instruments, as this would not be meaningful. 3 The range of inputs is not disclosed, as there is a dispersion of values given the diverse nature of the

investments. 4 Debt issued 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 equivalent derivative instrument parameters are presented in the respective derivative

financial instruments lines in this table.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 60

Note 8 Fair value measurement (continued)

d) 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 alternative assumptions would change fair value

significantly, and the estimated effect thereof. 

The sensitivity data shown below presents an estimation of valuation uncertainty based on reasonably possible

alternative values for Level 3 inputs at the balance sheet date and does not represent the estimated effect of stress

scenarios. Typically, these financial assets and liabilities are sensitive to a combination of inputs from Levels 1–3.

Although well-defined interdependencies may exist between Level 1 / 2 parameters and Level 3 parameters (e.g.,

between interest rates, which are generally Level 1 or Level 2, and prepayments, which are generally Level 3), these

have not been incorporated in the table. Furthermore, direct interrelationships between the Level 3 parameters are

not a significant element of the valuation uncertainty.

Sensitivity of fair value measurements to changes in unobservable input assumptions

1

30.9.23

30.6.23

31.12.22

USD m

Favorable 

changes

Unfavorable 

changes

Favorable 

changes

Unfavorable 

changes

Favorable 

changes

Unfavorable 

changes

Traded loans, loans measured at fair value, loan commitments and guarantees

 8

 (10)

 12

 (6)

 19

 (12)

Securities financing transactions

 25

 (24)

 27

 (18)

 33

 (37)

Auction rate securities

 66

 (22)

 44

 (44)

 46

 (46)

Asset-backed securities

 25

 (24)

 29

 (28)

 27

 (27)

Equity instruments

 185

 (160)

 193

 (169)

 183

 (161)

Interest rate derivatives, net

 13

 (12)

 5

 (18)

 18

 (12)

Credit derivatives, net

 2

 (6)

 4

 (3)

 3

 (4)

Foreign exchange derivatives, net

 4

 (3)

 6

 (6)

 10

 (5)

Equity / index derivatives, net

 279

 (246)

 350

 (318)

 361

 (330)

Other

 62

 (59)

 60

 (56)

 39

 (62)

Total

 669

 (567)

 730

 (666)

 738

 (696)

1 Sensitivity of issued and over-the-counter debt instruments is reported with the equivalent derivative or Other.

e) 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.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 61

Note 8 Fair value measurement (continued)

Movements of Level 3 instruments

USD bn

Balance at

the beginning

of the period

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 nine months ended 30 September 2023

2

Financial assets at fair value held for

trading

 1.5

 (0.0)

 (0.1)

 0.4

 (0.7)

 1.0

0.0

 0.1

 (0.3)

 (0.0)

 2.0

of which: Investment fund units

 0.1

 (0.0)

 (0.0)

 0.0

 (0.0)

0.0

0.0

 0.0

 (0.0)

 (0.0)

 0.0

of which: Corporate and municipal

bonds

 0.5

 (0.0)

 (0.0)

 0.4

 (0.2)

0.0

0.0

 0.0

 (0.0)

 (0.0)

 0.7

of which: Loans

 0.6

 0.0

 (0.0)

 0.0

 (0.4)

 1.0

0.0

0.0

 (0.2)

 (0.0)

 1.1

Derivative financial instruments –

assets

 1.5

 (0.1)

 (0.0)

 0.0

 (0.0)

 0.5

 (0.3)

 0.1

 (0.2)

 0.0

 1.5

of which: Interest rate

 0.5

 0.1

 0.1

 0.0

0.0

 0.1

 (0.0)

0.0

 (0.0)

 (0.0)

 0.6

of which: Equity / index

 0.7

 (0.1)

 (0.0)

0.0

0.0

 0.3

 (0.2)

 0.0

 (0.2)

 (0.0)

 0.5

of which: Credit

 0.3

 (0.1)

 (0.1)

0.0

0.0

 0.0

 (0.0)

 0.1

 (0.0)

 0.0

 0.4

Financial assets at fair value not held

for trading

 3.7

 0.3

 0.3

 0.6

 (0.6)

0.0

 (0.0)

 0.1

 (0.1)

 0.0

 4.0

of which: Loans

 0.7

 0.3

 0.3

 0.2

 (0.0)

0.0

 (0.0)

 0.1

 (0.1)

 (0.0)

 1.1

of which: Auction rate securities

 1.3

 0.0

 0.0

0.0

 (0.1)

0.0

0.0

0.0

0.0

0.0

 1.2

of which: Equity instruments

 0.8

 0.0

 (0.0)

 0.4

 (0.2)

0.0

0.0

 0.0

0.0

 (0.0)

 1.0

Derivative financial instruments –

liabilities

 1.7

 (0.1)

 (0.1)

 0.0

 (0.0)

 1.1

 (0.4)

 0.1

 (0.5)

 (0.0)

 1.8

of which: Interest rate

 0.1

 0.0

 0.0

 0.0

0.0

 0.1

 (0.1)

 0.0

 (0.0)

 (0.0)

 0.1

of which: Equity / index

 1.2

 (0.1)

 (0.1)

0.0

0.0

 0.6

 (0.3)

 0.0

 (0.1)

 (0.0)

 1.3

of which: Credit

 0.3

 (0.0)

 (0.0)

0.0

0.0

 0.3

 0.0

 0.0

 (0.3)

 (0.0)

 0.2

Debt issued designated at fair value

 9.2

 0.1

 0.0

0.0

0.0

 4.5

 (2.9)

 0.4

 (1.5)

 (0.1)

 9.8

Other financial liabilities designated at

fair value

 2.0

 (0.0)

 (0.0)

0.0

0.0

 0.1

 (0.1)

 0.0

 (0.0)

 (0.0)

 2.1

For the nine months ended 30 September 2022

Financial assets at fair value held for

trading

 2.3

 (0.2)

 (0.2)

 0.3

 (1.4)

 0.3

0.0

 0.3

 (0.3)

 (0.0)

 1.3

of which: Investment fund units

 0.0

 0.0

 0.0

 0.0

 (0.0)

0.0

0.0

 0.1

 (0.0)

 (0.0)

 0.1

of which: Corporate and municipal

bonds

 0.6

 (0.0)

 (0.0)

 0.2

 (0.2)

0.0

0.0

 0.0

 (0.0)

 (0.0)

 0.5

of which: Loans

 1.4

 (0.1)

 (0.1)

 0.0

 (1.1)

 0.3

0.0

0.0

 (0.2)

 (0.0)

 0.5

Derivative financial instruments –

assets

 1.1

 0.8

 0.5

0.0

0.0

 0.6

 (0.7)

 0.1

 (0.1)

 (0.1)

 1.7

of which: Interest rate

 0.5

 0.2

 0.2

0.0

0.0

 0.0

 (0.1)

 0.1

 (0.1)

 (0.1)

 0.5

of which: Equity / index

 0.4

 0.4

 0.3

0.0

0.0

 0.2

 (0.3)

 0.0

 (0.0)

 (0.0)

 0.7

of which: Credit

 0.2

 0.1

 (0.1)

0.0

0.0

 0.2

 (0.2)

 0.0

 0.0

 0.0

 0.4

Financial assets at fair value not held

for trading

 4.2

 0.1

 0.1

 0.6

 (0.8)

 0.1

 (0.0)

 0.1

 (0.3)

 (0.1)

 3.9

of which: Loans

 0.9

 (0.0)

 (0.1)

 0.4

 (0.4)

 0.1

0.0

 0.0

 (0.3)

 (0.0)

 0.7

of which: Auction rate securities

 1.6

 0.1

 0.1

 0.0

0.0

0.0

0.0

0.0

0.0

0.0

 1.7

of which: Equity instruments

 0.7

 0.0

 0.0

 0.1

 (0.1)

0.0

0.0

 0.1

0.0

 (0.0)

 0.8

Derivative financial instruments –

liabilities

 2.2

 (0.8)

 (0.6)

0.0

0.0

 1.3

 (0.8)

 0.1

 (0.2)

 (0.2)

 1.7

of which: Interest rate

 0.3

 (0.2)

 (0.1)

0.0

0.0

 0.1

 (0.0)

 0.0

 0.0

 (0.1)

 0.1

of which: Equity / index

 1.5

 (0.5)

 (0.5)

0.0

0.0

 1.0

 (0.7)

 0.0

 (0.2)

 (0.1)

 1.2

of which: Credit

 0.3

 (0.1)

 (0.1)

0.0

0.0

 0.1

 (0.0)

 0.1

 (0.0)

 (0.0)

 0.3

Debt issued designated at fair value

 11.9

 (1.7)

 (1.4)

0.0

0.0

 4.4

 (3.0)

 0.5

 (2.8)

 (0.5)

 8.6

Other financial liabilities designated at

fair value

 3.2

 (1.0)

 (1.0)

0.0

0.0

 0.2

 (0.3)

 0.1

 (0.2)

 (0.1)

 1.9

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 30 September 2023 were USD 7.4bn

(31 December 2022: USD 6.7bn). Total Level 3 liabilities as of 30 September 2023 were USD 13.8bn (31 December 2022: USD 13.0bn).

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 62

Note 8 Fair value measurement (continued)

f) Financial instruments not measured at fair value

The table below reflects the estimated fair values of financial instruments not measured at fair value. Valuation

principles applied when determining fair value estimates for financial instruments not measured at fair value are

consistent with those described in “Note 20 Fair value measurement” in the “Consolidated financial statements”

section of the Annual Report 2022.

Financial instruments not measured at fair value

30.9.23

30.6.23

31.12.22

USD bn

Carrying

amount

Fair value

Carrying

amount

Fair value

Carrying

amount

Fair value

Assets

Cash and balances at central banks

 161.7

 161.7

 159.4

 159.4

 169.4

 169.4

Loans and advances to banks

 20.2

 20.1

 21.4

 21.4

 14.7

 14.6

Receivables from securities financing transactions measured at amortized cost

 61.3

 61.3

 62.0

 62.0

 67.8

 67.8

Cash collateral receivables on derivative instruments

 36.3

 36.3

 35.1

 35.1

 35.0

 35.0

Loans and advances to customers

 386.3

 374.0

 397.6

 385.1

 390.0

 377.7

Other financial assets measured at amortized cost

 52.9

 52.3

 52.2

 51.8

 53.4

 51.0

Liabilities

Amounts due to banks

 16.2

 16.2

 16.3

 16.3

 11.6

 11.6

Payables from securities financing transactions measured at amortized cost

 6.2

 6.2

 12.3

 12.3

 4.2

 4.2

Cash collateral payables on derivative instruments

 32.4

 32.4

 31.4

 31.4

 36.4

 36.4

Customer deposits

 521.5

 521.6

 521.7

 521.4

 527.2

 526.9

Funding from UBS Group AG measured at amortized cost

 63.4

 63.1

 61.4

 60.3

 56.1

 55.7

Debt issued measured at amortized cost

 65.3

 64.9

 62.6

 62.0

 59.5

 58.9

Other financial liabilities measured at amortized cost

1

 8.1

 8.1

 8.6

 8.6

 7.2

 7.2

1 Excludes lease liabilities.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 63

Note 9

Derivative instruments

a) Derivative instruments

As of 30.9.23, USD bn

Derivative

financial

assets

Derivative

financial

liabilities

Notional values

related to derivative

financial assets and

liabilities

1

Other

notional

values

2

Derivative financial instruments

Interest rate

 41.3

 39.9

 2,455

 14,319

Credit derivatives

 1.3

 1.4

 99

Foreign exchange 

 68.0

 65.3

 6,437

 106

Equity / index 

 22.3

 24.7

 1,046

 80

Commodities

 1.6

 1.5

 139

 16

Other

3

0.5

0.6

121

Total derivative financial instruments, based on IFRS netting

4

 135.0

 133.4

 10,297

 14,521

Further netting potential not recognized on the balance sheet

5

 (121.9)

 (124.0)

of which: netting of recognized financial liabilities / assets

 (99.0)

 (99.0)

of which: netting with collateral received / pledged

 (23.0)

 (25.0)

Total derivative financial instruments, after consideration of further netting potential

 13.1

 9.3

As of 30.6.23, USD bn

Derivative financial instruments

Interest rate 

 39.5

 38.0

 2,356

 15,180

Credit derivatives

 1.4

 1.5

 90

Foreign exchange 

 58.9

 59.7

 6,636

 78

Equity / index 

 22.4

 26.1

 1,001

 77

Commodities

 1.4

 1.5

 141

 16

Other

3

0.5

0.5

121

Total derivative financial instruments, based on IFRS netting

4

 124.0

 127.4

 10,345

 15,351

Further netting potential not recognized on the balance sheet

5

 (114.0)

 (116.0)

of which: netting of recognized financial liabilities / assets

 (92.8)

 (92.8)

of which: netting with collateral received / pledged

 (21.2)

 (23.2)

Total derivative financial instruments, after consideration of further netting potential

 10.1

 11.4

As of 31.12.22, USD bn

Derivative financial instruments

Interest rate 

 39.8

 37.5

 2,080

 11,255

Credit derivatives

 1.0

 1.2

 74

Foreign exchange 

 85.5

 88.5

 6,080

 40

Equity / index 

 22.2

 26.1

 886

 63

Commodities

 1.4

 1.4

 132

 18

Other

3

0.2

0.1

50

Total derivative financial instruments, based on IFRS netting

4

 150.1

 154.9

 9,302

 11,376

Further netting potential not recognized on the balance sheet

5

 (139.4)

 (137.1)

of which: netting of recognized financial liabilities / assets

 (110.9)

 (110.9)

of which: netting with collateral received / pledged

 (28.5)

 (26.2)

Total derivative financial instruments, after consideration of further netting potential

 10.7

 17.8

1 In cases where derivative financial instruments are presented on a net basis on the balance sheet, the respective notional values of the netted derivative financial instruments are still presented on a gross basis.

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 Other notional values relate to derivatives

that are cleared through either a central counterparty or an exchange. 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 all periods presented. 3 Includes mainly 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 Financial assets and liabilities

are presented net on the balance sheet if UBS AG 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 UBS AG or its counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 5 Reflects the netting potential in accordance with enforceable

master netting and similar arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 21 Offsetting financial assets and financial liabilities” in the “Consolidated

financial statements” section of the Annual Report 2022 for more information.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 64

Note 9

Derivative instruments (continued)

b) Cash collateral on derivative instruments

USD bn

Receivables

30.9.23

Payables

30.9.23

Receivables

30.6.23

Payables

30.6.23

Receivables

31.12.22

Payables

31.12.22

Cash collateral on derivative instruments, based on IFRS netting

1

 36.3

 32.4

 35.1

 31.4

 35.0

 36.4

Further netting potential not recognized on the balance sheet

2

 (23.1)

 (19.6)

 (22.9)

 (18.8)

 (22.9)

 (21.9)

of which: netting of recognized financial liabilities / assets

 (20.6)

 (16.7)

 (20.3)

 (16.1)

 (20.9)

 (20.0)

of which: netting with collateral received / pledged

 (2.5)

 (2.9)

 (2.6)

 (2.6)

 (1.9)

 (1.9)

Cash collateral on derivative instruments, after consideration of further netting

potential

 13.2

 12.9

 12.1

 12.7

 12.1

 14.5

1 Financial assets and liabilities are presented net on the balance sheet if UBS AG 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 UBS AG or its counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 2 Reflects the netting potential

in accordance with enforceable master netting and similar arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 21 Offsetting financial assets and financial

liabilities” in the “Consolidated financial statements” section of the Annual Report 2022 for more information.

Note

10

Other assets and liabilities 

a) Other financial assets measured at amortized cost

USD m

30.9.23

30.6.23

31.12.22

Debt securities

 42,468

 41,521

 44,594

Loans to financial advisors

 2,582

 2,588

 2,611

Fee- and commission-related receivables

 1,726

 1,822

 1,803

Finance lease receivables

 1,344

 1,376

 1,314

Settlement and clearing accounts 

 333

 395

 1,174

Accrued interest income

 1,652

 1,430

 1,276

Other

 2,819

 3,048

 618

Total other financial assets measured at amortized cost

 52,923

 52,180

 53,389

b) Other non-financial assets

USD m

30.9.23

30.6.23

31.12.22

Precious metals and other physical commodities 

 4,312

 4,426

 4,471

Deposits and collateral provided in connection with litigation, regulatory and similar matters

1

 2,186

 2,250

 2,205

Prepaid expenses

 1,021

 1,019

 709

VAT, withholding tax and other tax receivables

 713

 707

 1,405

Properties and other non-current assets held for sale

 87

 111

 279

Other

 704

 741

 583

Total other non-financial assets

 9,024

 9,254

 9,652

1 Refer to Note 15 for more information. 

c) Other financial liabilities measured at amortized cost

USD m

30.9.23

30.6.23

31.12.22

Other accrued expenses

 1,473

 1,543

 1,564

Accrued interest expenses

 3,010

 2,577

 2,008

Settlement and clearing accounts

 1,435

 1,499

 1,060

Lease liabilities

 2,967

 3,105

 3,211

Other 

 2,229

 2,948

 2,549

Total other financial liabilities measured at amortized cost

 11,114

 11,673

 10,391

d) Other financial liabilities designated at fair value

USD m

30.9.23

30.6.23

31.12.22

Financial liabilities related to unit-linked investment contracts

 14,109

 15,055

 13,221

Securities financing transactions

 11,434

 11,344

 15,333

Over-the-counter debt instruments and other

 2,277

 2,727

 1,684

Funding from UBS Group AG

 2,191

 2,299

 1,796

Total other financial liabilities designated at fair value

 30,011

 31,425

 32,033

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 65

Note 10 Other assets and liabilities (continued)

e) Other non-financial liabilities

USD m

30.9.23

30.6.23

31.12.22

Compensation-related liabilities

 3,808

 3,248

 4,424

 of which: net defined benefit liability

 425

 455

 449

Current tax liabilities

 975

 991

 1,044

Deferred tax liabilities

 179

 212

 233

VAT, withholding tax and other tax payables

 517

 514

 472

Deferred income

 282

 280

 233

Other

 31

 86

 84

Total other non-financial liabilities

 5,791

 5,330

 6,489

Note

11

Funding from UBS Group AG measured at amortized cost

USD m

30.9.23

30.6.23

31.12.22

Senior unsecured debt that contributes to total loss-absorbing capacity (TLAC)

 50,612

 48,546

 42,073

Senior unsecured debt other than TLAC

 1,141

 1,180

 236

Subordinated debt

 11,660

 11,719

 13,838

of which: eligible as high-trigger loss-absorbing additional tier 1 capital instruments

 10,466

 10,528

 10,654

of which: eligible as low-trigger loss-absorbing additional tier 1 capital instruments

 1,194

 1,189

 1,187

Total funding from UBS Group AG measured at amortized cost

1

 63,412

 61,445

 56,147

1 UBS AG has also recognized funding from UBS Group AG that is designated at fair value. Refer to Note 10d for more information.

Note

12

Debt issued designated at fair value

USD m

30.9.23

30.6.23

31.12.22

Issued debt instruments

Equity-linked

1

 45,888

 45,475

 41,901

Rates-linked and fixed-rate

 28,827

 24,323

 22,814

Credit-linked

 4,360

 4,230

 2,170

Commodity-linked

 3,924

 3,979

 4,294

Other

 603

 734

 663

Total debt issued designated at fair value

 83,601

 78,741

 71,842

1 Includes investment fund unit-linked instruments issued. 

Note

13

Debt issued measured at amortized cost

USD m

30.9.23

30.6.23

31.12.22

Short-term debt

1

 36,353

 35,590

 29,676

Senior unsecured debt

 16,921

 14,920

 17,892

Subordinated debt

 2,988

 2,976

 2,968

of which: eligible as low-trigger loss-absorbing tier 2 capital instruments

 0

 0

 2,422

of which: eligible as non-Basel III-compliant tier 2 capital instruments

 536

 539

 536

Debt issued through the Swiss central mortgage institutions

 9,022

 9,076

 8,962

Long-term debt

2

 28,932

 26,971

 29,823

Total debt issued measured at amortized cost

3

 65,285

 62,561

 59,499

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.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 66

Note 14 Interest rate benchmark reform

During 2023, UBS AG has largely completed the transition of the remaining USD London Interbank Offered Rate

(LIBOR) contracts.

UBS AG has approximately USD 3bn equivalent of yen- and US dollar-denominated funding from UBS Group AG

that, per current contractual terms, if not called on their respective call dates, would reset based directly on JPY

LIBOR and USD LIBOR. In October 2023, notification was made that approximately USD 1bn of these instruments

would be redeemed in November 2023. In addition, several contracts providing funding from UBS Group AG

reference rates indirectly derived from IBORs, if they are not called on their respective call dates. These contracts

have robust IBOR fallback language and the confirmation of interest rate calculation mechanics will be

communicated in advance of any rate resets.

Note 15 Provisions and contingent liabilities

a) Provisions

The table below presents an overview of total provisions.

USD m

30.9.23

30.6.23

31.12.22

Provisions other than provisions for expected credit losses

 2,142

 3,641

 2,982

Provisions for expected credit losses

1

 176

 175

 201

Total provisions

 2,318

 3,817

 3,183

1 Refer to Note 7c for more information. 

The table below presents additional information for provisions other than provisions for expected credit losses.

USD m

Litigation,

regulatory and

similar matters

1

Other

2

Total

Balance as of 31 December 2022

 2,586

 396

 2,982

Balance as of 30 June 2023

 3,289

 353

 3,641

Increase in provisions recognized in the income statement

 19

 88

 107

Release of provisions recognized in the income statement

 (11)

 (6)

 (16)

Provisions used in conformity with designated purpose

 (1,518)

 (21)

 (1,539)

Foreign currency translation and other movements

3

 (45)

 (7)

 (51)

Balance as of 30 September 2023

 1,735

 407

 2,142

1 Consists of provisions for losses resulting from legal, liability and compliance risks. 2 Mainly includes restructuring provisions and provisions related to real estate, employee benefits and operational risks. 3 Other

movements include capitalized reinstatement costs and unwinding of discount.

Information about provisions and contingent liabilities in respect of litigation, regulatory and similar matters, as a

class, is included in Note 15b. There are no material contingent liabilities associated with the other classes of

provisions.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 67

Note 15 Provisions and contingent liabilities (continued)

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.

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, in which case the matter

is treated as a contingent liability under the applicable accounting standard; 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 15a above. It is not practicable to provide an aggregate estimate of liability for our

litigation, regulatory and similar matters as a class of contingent liabilities. Doing so would require UBS to provide

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. Although UBS therefore cannot provide a numerical estimate of the future losses

that could arise from litigation, regulatory and similar matters, UBS believes that the aggregate amount of possible

future losses from this class that are more than remote substantially exceeds the level of current provisions. 

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 68

Note 15 Provisions and contingent liabilities (continued)

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.

The risk of loss associated with litigation, regulatory and similar matters is a component of operational risk for

purposes of determining capital requirements. Information concerning our capital requirements and the calculation

of operational risk for this purpose is included in the “Capital management” section of this report.

Provisions for litigation, regulatory and similar matters by business division and in Group Items

1

USD m

Global Wealth

Management

Personal &

Corporate

Banking

Asset

Management

Investment

Bank

Non-

core and

Legacy

2

Group Items

2

Total

Balance as of 31 December 2022

 1,182

 159

 8

 308

 770

 158

 2,586

Balance as of 30 June 2023

 1,196

 162

 8

 327

 1,435

 160

 3,289

Increase in provisions recognized in the income statement

 19

 0

 0

 0

 0

 0

 19

Release of provisions recognized in the income statement

 (2)

 (9)

 0

 0

 0

 0

 (11)

Provisions used in conformity with designated purpose

 (26)

 0

 0

 (56)

 (1,435)

 0

 (1,518)

Foreign currency translation and other movements

 (38)

 (5)

 0

 (5)

 4

 (1)

 (45)

Balance as of 30 September 2023

 1,149

 149

 8

 265

 4

 159

 1,735

1 Provisions, if any, for the matters described in item 3 of this Note are recorded in Global Wealth Management, and provisions, if any, for the matters described in item 2 are recorded in Non-core and Legacy.

Provisions, if any, for the matters described in items 1 and 5 of this Note are allocated between Global Wealth Management and Personal & Corporate Banking, and provisions, if any, for the matters described in

item 4 are allocated between the Investment Bank and Group Items. 2 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment and Group Functions has been renamed

Group Items. Prior periods have been revised to reflect these changes.

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 and other financial institutions.

Since 2013, UBS (France) S.A., UBS AG and certain former employees have been under investigation in France in

relation to UBS’s cross-border business with French clients. In connection with this investigation, the investigating

judges ordered UBS AG to provide bail (“

caution

”) of EUR 1.1bn.

In 2019, the court of first instance returned a verdict finding UBS AG guilty of unlawful solicitation of clients on

French territory and aggravated laundering of the proceeds of tax fraud, and UBS (France) S.A. guilty of aiding and

abetting unlawful solicitation and of laundering the proceeds of tax fraud. The court imposed fines aggregating

EUR 3.7bn on UBS AG and UBS (France) S.A. and awarded EUR 800m of civil damages to the French state. A trial

in the French Court of Appeal took place in March 2021. In December 2021, the Court of Appeal found UBS AG

guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud. The court ordered a fine of

EUR 3.75m, the confiscation of EUR 1bn, and awarded civil damages to the French state of EUR 800m. UBS

appealed the decision to the French Supreme Court. On 27 September 2023, the Supreme Court held a hearing

on UBS’s appeal. At the conclusion of the hearing the court stated that it will communicate its decision on

15 November 2023. The fine and confiscation imposed by the Court of Appeal are suspended during the appeal.

The civil damages award has been paid to the French state (EUR 99m of which was deducted from the bail), subject

to the result of UBS’s appeal.

Our balance sheet at 30 September 2023 reflected provisions with respect to this matter in an amount of EUR 1.1bn

(USD 1.2bn). The wide range of possible outcomes in this case contributes to a high degree of estimation

uncertainty and the provision reflects our best estimate of possible financial implications, although actual penalties

and civil damages could exceed (or may be less than) the provision amount.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 69

Note 15 Provisions and contingent liabilities (continued)

2. Claims related to sales of residential mortgage-backed securities and mortgages

From 2002 through 2007, prior to the crisis in the US residential loan market, UBS was a substantial issuer and

underwriter of US residential mortgage-backed securities (RMBS) and was a purchaser and seller of US residential

mortgages. 

In 2018, the DOJ filed a civil complaint in the District Court for the Eastern District of New York. The complaint

seeks unspecified civil monetary penalties under the Financial Institutions Reform, Recovery and Enforcement Act

of 1989 related to UBS’s issuance, underwriting and sale of 40 RMBS transactions in 2006 and 2007. UBS moved

to dismiss the civil complaint in 2019. Later in 2019, the district court denied UBS’s motion to dismiss. In August

2023, UBS reached a settlement with the DOJ, under which UBS paid USD 1.435bn to resolve all civil claims by the

DOJ.

3. 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 have been 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 serve 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 2.1bn, 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 filed in Luxembourg, where decisions

that the claims in eight test cases were inadmissible have been affirmed by the Luxembourg Court of Appeal, and

the Luxembourg Supreme Court has dismissed a further appeal in one of the test cases.

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 2bn. In 2014, the US Supreme Court rejected the BMIS Trustee’s motion for leave to appeal decisions

dismissing all claims except those for the recovery of approximately USD 125m of payments alleged to be fraudulent

conveyances and preference payments. In 2016, the bankruptcy court dismissed these claims against the UBS

entities. In 2019, the Court of Appeals reversed the dismissal of the BMIS Trustee’s remaining claims, and the US

Supreme Court subsequently denied a petition seeking review of the Court of Appeals’ decision. The case has been

remanded to the Bankruptcy Court for further proceedings.

4. Foreign exchange, LIBOR and benchmark rates, and other trading practices

Foreign exchange-related regulatory matters:

 Beginning in 2013, numerous authorities commenced investigations

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 United Kingdom 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.

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 70

Note 15 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 and other banks on behalf of putative classes of persons who engaged in foreign

currency transactions with any of the defendant banks. UBS has 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 under a settlement agreement that provides for UBS to pay an aggregate of

USD 141m and provide cooperation to the settlement classes. Certain class members have excluded themselves

from that settlement and have filed individual actions in US and English courts against UBS and other banks, alleging

violations of US and European competition laws and unjust enrichment. UBS and the other banks have resolved

those individual matters.

In 2015, a putative class action was filed in federal court against UBS and numerous other banks on behalf of

persons and businesses in the US who directly purchased foreign currency from the defendants and alleged co-

conspirators for their own end use. In 2022, the court denied plaintiffs’ motion for class certification. In March

2023, the court granted defendants’ summary judgment motion, dismissing the case. Plaintiffs have appealed.

LIBOR and other benchmark-related regulatory matters:

 Numerous government agencies conducted investigations

regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at

certain times. UBS 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 and the Swiss Competition Commission (WEKO),

in connection with potential antitrust or competition law violations related to certain rates. However, UBS has not

reached a final settlement with WEKO, as the Secretariat of WEKO has asserted that UBS does not qualify for full

immunity.

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, Euroyen TIBOR, Yen LIBOR,

EURIBOR, CHF LIBOR, GBP LIBOR and seek unspecified compensatory and other damages under varying legal

theories.

USD LIBOR class and individual actions in the US:

In 2013 and 2015, the district court in the USD LIBOR actions

dismissed, in whole or in part, certain plaintiffs’ antitrust claims, federal racketeering claims, Commodity Exchange

Act claims, and state common law claims, and again dismissed the antitrust claims in 2016 following an appeal. In

2021, the Second Circuit affirmed the district court’s dismissal in part and reversed in part and remanded to the

district court for further proceedings. The Second Circuit, among other things, held that there was personal

jurisdiction over UBS and other foreign defendants. Separately, in 2018, the Second Circuit reversed in part the

district court’s 2015 decision dismissing certain individual plaintiffs’ claims and certain of these actions are now

proceeding. In 2018, the district court denied plaintiffs’ motions for class certification in the USD class actions for

claims pending against UBS, and plaintiffs sought permission to appeal that ruling to the Second Circuit. The Second

Circuit denied the petition to appeal. In 2020, an individual action was filed in the Northern District of California

against UBS and numerous other banks alleging that the defendants conspired to fix the interest rate used as the

basis for loans to consumers by jointly setting the USD LIBOR rate and monopolized the market for LIBOR-based

consumer loans and credit cards. In September 2022, the court granted defendants’ motion to dismiss the

complaint in its entirety, while allowing plaintiffs the opportunity to file an amended complaint. Plaintiffs filed an

amended complaint in October 2022, and defendants have moved to dismiss the amended complaint. In October

2023, the court dismissed the amended complaint with prejudice.

Other benchmark class actions in the US: 

Yen LIBOR / Euroyen TIBOR –

In 2017, the court dismissed one Yen LIBOR / Euroyen TIBOR action in its entirety on

standing grounds. In 2020, the appeals court reversed the dismissal and, subsequently, plaintiffs in that action filed

an amended complaint focused on Yen LIBOR. In 2022, the court granted UBS’s motion for reconsideration and

dismissed the case against UBS. The dismissal of the case against UBS could be appealed following the disposition

of the case against the remaining defendant in the district court. 

UBS AG third quarter 2023 report |

Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 71

Note 15 Provisions and contingent liabilities (continued)

CHF LIBOR

 – In 2017, the court dismissed the CHF LIBOR action on standing grounds and failure to state a claim.

Plaintiffs filed an amended complaint, and the court granted a renewed motion to dismiss in 2019. Plaintiffs

appealed. In 2021, the Second Circuit granted the parties’ joint motion to vacate the dismissal and remand the case

for further proceedings. Plaintiffs filed a third amended complaint in November 2022 and defendants moved to

dismiss the amended complaint in January 2023.

EURIBOR

 – In 2017, the court in the EURIBOR lawsuit dismissed the case as to UBS and certain other foreign

defendants for lack of personal jurisdiction. Plaintiffs have appealed. 

GBP LIBOR

 – The court dismissed the GBP LIBOR action in 2019. Plaintiffs have appealed.

Government bonds:

 Putative class actions have been filed since 2015 in US federal courts against UBS and other

banks on behalf of persons who participated in markets for US Treasury securities since 2007. A consolidated

complaint was filed in 2017 in the US District Court for the Southern District of New York alleging that the banks

colluded with respect to, and manipulated prices of, US Treasury securities sold at auction and in the secondary

market and asserting claims under the antitrust laws and for unjust enrichment. Defendants’ motions to dismiss

the consolidated complaint were granted in 2021. Plaintiffs filed an amended complaint, which defendants moved

to dismiss later in 2021. In March 2022, the court granted defendants’ motion to dismiss that complaint. Plaintiffs

have appealed the dismissal. Similar class actions have been filed concerning European government bonds and

other government bonds.

In 2021, the European Commission issued a decision finding that UBS and six other banks breached European

Union antitrust rules in 2007–2011 relating to European government bonds. The European Commission fined UBS

EUR 172m. UBS is appealing the amount of the fine.

With respect to additional matters and jurisdictions not encompassed by the settlements and orders referred to

above, our balance sheet at 30 September 2023 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.

5. Swiss retrocessions

The Federal Supreme Court of Switzerland ruled in 2012, in a test case against UBS, that distribution fees paid to

a firm for distributing third-party and intra-group investment funds and structured products must be disclosed and

surrendered to clients who have entered into a discretionary mandate agreement with the firm, absent a valid

waiver. FINMA issued a supervisory note to all Swiss banks in response to the Supreme Court decision. UBS has met

the FINMA requirements and has notified all potentially affected clients.

The Supreme Court decision has resulted, and continues to result, in a number of client requests for UBS to disclose

and potentially surrender retrocessions. Client requests are assessed on a case-by-case basis. Considerations taken

into account when assessing these cases include, among other things, the existence of a discretionary mandate and

whether or not the client documentation contained a valid waiver with respect to distribution fees.

Our balance sheet at 30 September 2023 reflected a provision with respect to matters described in this item 5 in

an amount that UBS believes to be appropriate under the applicable accounting standard. The ultimate exposure

will depend on client requests and the resolution thereof, factors that are difficult to predict and assess. Hence, 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.

UBS AG third quarter 2023 report |

Appendix 72

Appendix

Alternative performance measures

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. A number of APMs are reported in the discussion of the

financial and operating performance of the external reports (annual, quarterly and other reports). APMs are used

to provide a more complete picture of operating performance and to reflect management’s view of the fundamental

drivers of the business results. A definition of each APM, the method used to calculate it and the information

content are presented in alphabetical order in the table below. These APMs may qualify as non-GAAP measures as

defined by US Securities and Exchange Commission (SEC) regulations.

APM label

Calculation 

Information content

Active Digital Banking clients in

Corporate & Institutional Clients (%)

– Personal & Corporate Banking

Calculated as the average number of active clients for

each month in the relevant period divided by the

average number of total clients. “Clients” refers to

the number of unique business relationships or legal

entities operated by Corporate & Institutional Clients,

excluding clients that do not have an account, mono-

product clients and clients that have defaulted on

loans or credit facilities. At the end of each month,

any client that has logged on at least once in that

month is determined to be “active” (a log-in time

stamp is allocated to all business relationship numbers

or per legal entity in a digital banking contract).

This measure provides information about the

proportion of active Digital Banking clients in the total

number of UBS clients (within the aforementioned

meaning) which are serviced by Corporate &

Institutional Clients.

Active Digital Banking clients in

Personal Banking (%)

– Personal & Corporate Banking

Calculated as the average number of active clients for

each month in the relevant period divided by the

average number of total clients. “Clients” refers to

the number of unique business relationships operated

by Personal Banking, excluding persons under the age

of 15, clients who do not have a private account,

clients domiciled outside Switzerland and clients who

have defaulted on loans or credit facilities. At the end

of each month, any client that has logged on at least

once in that month is determined to be “active” (a

log-in time stamp is allocated to all business

relationship numbers in a digital banking contract).

This measure provides information about the

proportion of active Digital Banking clients in the total

number of UBS clients (within the aforementioned

meaning) who are serviced by Personal Banking.

Active Mobile Banking clients in

Personal Banking (%)

– Personal & Corporate Banking

Calculated as the average number of active clients for

each month in the relevant period divided by the

average number of total clients. “Clients” refers to

the number of unique business relationships operated

by Personal Banking, excluding persons under the age

of 15, clients who do not have a private account,

clients domiciled outside Switzerland and clients who

have defaulted on loans or credit facilities. At the end

of each month, any client that has logged on via the

mobile app at least once in that month is determined

to be “active” (a log-in time stamp is allocated to all

business relationship numbers in a digital banking

contract).

This measure provides information about the

proportion of active Mobile Banking clients in the

total number of UBS clients (within the

aforementioned meaning) who are serviced by

Personal Banking.

Cost / income ratio (%)

Calculated as operating expenses divided by total

revenues.

This measure provides information about the

efficiency of the business by comparing operating

expenses with gross income.

Fee and trading income for Corporate &

Institutional Clients (USD and CHF)

– Personal & Corporate Banking

Calculated as the total of recurring net fee and

transaction-based income for Corporate &

Institutional Clients.

This measure provides information about the amount

of fee and trading income for Corporate &

Institutional Clients.

UBS AG third quarter 2023 report |

Appendix 73

APM label

Calculation 

Information content

Fee-pool-comparable revenues (USD)

– the Investment Bank

Calculated as the total of revenues from: merger-and-

acquisition-related transactions; Equity Capital

Markets, excluding derivatives; Leveraged Capital

Markets, excluding the impact of mark-to-market

movements on loan portfolios; and Debt Capital

Markets, excluding revenues related to debt

underwriting of UBS instruments.

This measure provides information about the amount

of revenues in the Investment Bank that are

comparable with the relevant global fee pools.

Gross margin on invested assets (bps)

– Asset Management

Calculated as total revenues (annualized as applicable)

divided by average invested assets.

This measure provides information about the total

revenues of the business in relation to invested assets.

Impaired loan portfolio as a percentage

of total loan portfolio, gross (%)

– Global Wealth Management,

Personal & Corporate Banking

Calculated as impaired loan portfolio divided by total

gross loan portfolio.

This measure provides information about the

proportion of impaired loan portfolio in the total gross

loan portfolio.

Integration-related expenses (USD)

Generally include 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.

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. Integration-related expenses

incurred by Credit Suisse also included expenses

associated with restructuring programs that existed

prior to the acquisition.

This measure provides information about expenses

that are temporary, incremental and directly related to

the integration of Credit Suisse into UBS.

Invested assets (USD and CHF)

– Global Wealth Management,

Personal & Corporate Banking,

Asset Management

Calculated as the sum of managed fund assets,

managed institutional assets, discretionary and

advisory wealth management portfolios, fiduciary

deposits, time deposits, savings accounts, and wealth

management securities or brokerage accounts.

This measure provides information about the volume

of client assets managed by or deposited with UBS for

investment purposes.

Investment products for Personal

Banking (USD and CHF)

– Personal & Corporate Banking

Calculated as the sum of investment funds (including

UBS Vitainvest third-pillar pension funds, as well as

money market funds), mandates and third-party life

insurance operated in Personal Banking.

This measure provides information about the volume

of investment funds (including UBS Vitainvest third-

pillar pension funds, as well as money market funds),

mandates and third-party life insurance operated in

Personal Banking.

Net interest margin (bps)

– Personal & Corporate Banking

Calculated as net interest income (annualized as

applicable) divided by average loans.

This measure provides information about the

profitability of the business by calculating the

difference between the price charged for lending and

the cost of funding, relative to loan value.

Net new investment products for

Personal Banking (USD and CHF)

– Personal & Corporate Banking

Calculated as the net amount of inflows and outflows

of investment products during a specific period.

This measure provides information about the

development of investment products during a specific

period as a result of net new investment product

flows.

Net new money (USD)

– Global Wealth Management,

Asset Management

Calculated as the net amount of inflows and outflows

of invested assets (as defined in UBS policy) recorded

during a specific period. Excluded from the calculation

are movements due to market performance, foreign

exchange translation, dividends, interest and fees, as

well as the effects on invested assets of strategic

decisions by UBS to exit markets or services. Net new

money is not measured for Personal & Corporate

Banking.

This measure provides information about the

development of invested assets during a specific

period as a result of net new money flows.

Net new money growth rate (%)

– Global Wealth Management

Calculated as the net amount of inflows and outflows

of invested assets (as defined in UBS policy) recorded

during a specific period (annualized as applicable)

divided by total invested assets at the beginning of

the period. 

This measure provides information about the growth

of invested assets during a specific period as a result

of net new money flows.

Net profit growth (%)

Calculated as the change in net profit attributable to

shareholders from continuing operations between

current and comparison periods divided by net profit

attributable to shareholders from continuing

operations of the comparison period.

This measure provides information about profit

growth since the comparison period.

Operating expenses (underlying)

(USD)

Calculated by adjusting operating expenses as

reported in accordance with International Financial

Reporting Standards (IFRS) for items that

management believes are not representative of the

underlying performance of the businesses.

›

Refer to the “Group performance” section of the

UBS Group third quarter 2023 report for more

information

This measure provides information about the amount

of operating expenses, while excluding items that

management believes are not representative of the

underlying performance of the businesses.

UBS AG third quarter 2023 report |

Appendix 74

APM label

Calculation 

Information content

Operating profit / (loss) before tax

(underlying) (USD)

Calculated by adjusting operating profit / (loss) before

tax as reported in accordance with International

Financial Reporting Standards (IFRS) for items that

management believes are not representative of the

underlying performance of the businesses.

›

Refer to the “Group performance” section of the

UBS Group third quarter 2023 report for more

information

This measure provides information about the amount

of operating profit / (loss) before tax, while excluding

items that management believes are not

representative of the underlying performance of the

businesses.

Pre-tax profit growth (%)

– Global Wealth Management,

Personal & Corporate Banking,

Asset Management,

the Investment Bank

Calculated as the change in net profit before tax

attributable to shareholders from continuing

operations between current and comparison periods

divided by net profit before tax attributable to

shareholders from continuing operations of the

comparison period.

This measure provides information about pre-tax

profit growth since the comparison period.

Recurring net fee income

(USD and CHF)

– Global Wealth Management,

Personal & Corporate Banking

Calculated as the total of fees for services provided on

an ongoing basis, such as portfolio management fees,

asset-based investment fund fees and custody fees,

which are generated on client assets, and

administrative fees for accounts.

This measure provides information about the amount

of recurring net fee income.

Return on attributed equity

1

 (%)

Calculated as annualized business division operating

profit before tax divided by average attributed equity.

This measure provides information about the

profitability of the business divisions in relation to

attributed equity.

Return on common equity tier 1

capital

1

 (%)

Calculated as annualized net profit attributable to

shareholders divided by average common equity tier 1

capital.

This measure provides information about the

profitability of the business in relation to common

equity tier 1 capital.

Return on equity

1

 (%)

Calculated as annualized net profit attributable to

shareholders divided by average equity attributable to

shareholders.

This measure provides information about the

profitability of the business in relation to equity.

Return on leverage ratio denominator,

gross

1

 (%)

Calculated as annualized total revenues divided by

average leverage ratio denominator.

This measure provides information about the revenues

of the business in relation to the leverage ratio

denominator.

Return on tangible equity

1

 (%)

Calculated as annualized net profit attributable to

shareholders divided by average equity attributable to

shareholders less average goodwill and intangible

assets.

This measure provides information about the

profitability of the business in relation to tangible

equity.

Tangible book value per share

(USD)

Calculated as equity attributable to shareholders less

goodwill and intangible assets divided by the number

of shares outstanding.

This measure provides information about tangible net

assets on a per-share basis.

Total book value per share

(USD)

Calculated as equity attributable to shareholders

divided by the number of shares outstanding.

This measure provides information about net assets

on a per-share basis.

Total revenues (underlying)

(USD)

Calculated by adjusting total revenues as reported in

accordance with International Financial Reporting

Standards (IFRS) for items that management believes

are not representative of the underlying performance

of the businesses.

›

Refer to the “Group performance” section of the

UBS Group third quarter 2023 report for more

information

This measure provides information about the amount

of total revenues, while excluding items that

management believes are not representative of the

underlying performance of the businesses.

Transaction-based income

(USD and CHF)

– Global Wealth Management,

Personal & Corporate Banking

Calculated as the total of the non-recurring portion of

net fee and commission income, mainly composed of

brokerage and transaction-based investment fund

fees, and credit card fees, as well as fees for payment

and foreign-exchange transactions, together with

other net income from financial instruments

measured at fair value through profit or loss.

This measure provides information about the amount

of the non-recurring portion of net fee and

commission income, together with other net income

from financial instruments measured at fair value

through profit or loss.

Underlying cost / income ratio (%)

Calculated as underlying operating expenses (as

defined above) divided by underlying total revenues

(as defined above). 

This measure provides information about the

efficiency of the business by comparing operating

expenses with total revenues, while excluding items

that management believes are not representative of

the underlying performance of the businesses.

UBS AG third quarter 2023 report |

Appendix 75

APM label

Calculation 

Information content

Underlying net profit growth (%)

Calculated as the change in net profit attributable to

shareholders from continuing operations between

current and comparison periods divided by net profit

attributable to shareholders from continuing

operations of the comparison period. Net profit

attributable to shareholders from continuing

operations excludes items that management believes

are not representative of the underlying performance

of the businesses and also excludes related tax

impact.

This measure provides information about profit

growth since the comparison period, while excluding

items that management believes are not

representative of the underlying performance of the

businesses.

Underlying return on common equity

tier 1 capital

1

 (%)

Calculated as annualized net profit attributable to

shareholders divided by average common equity tier 1

capital. Net profit attributable to shareholders

excludes items that management believes are not

representative of the underlying performance of the

businesses and also excludes related tax impact.

This measure provides information about the

profitability of the business in relation to common

equity tier 1 capital, while excluding items that

management believes are not representative of the

underlying performance of the businesses.

Underlying return on tangible equity

1

(%)

Calculated as annualized net profit attributable to

shareholders divided by average equity attributable to

shareholders less average goodwill and intangible

assets. Net profit attributable to shareholders excludes

items that management believes are not

representative of the underlying performance of the

businesses and also excludes related tax impact.

This measure provides information about the

profitability of the business in relation to tangible

equity, while excluding items that management

believes are not representative of the underlying

performance of the businesses.

1

Profit or loss information for the third quarter of 2023 includes three months of information for UBS and three months of information for Credit Suisse and, for the purpose of the calculation of return measures, has

been annualized multiplying such by four. Profit or loss information for the second quarter of 2023 includes three months of information for UBS and one month (June 2023) of information for Credit Suisse and, for the

purpose of the calculation of return measures, has been annualized multiplying such by four. Profit or loss information for the first nine months of 2023 includes nine months of information for UBS and four months

(June–September 2023) of information for Credit Suisse and, for the purpose of the calculation of return measures, has been annualized by dividing such by three and then multiplying by four for the year-to-date

measure.

This is a general list of the APMs used in our financial reporting. Not all of the APMs listed above may appear in

this particular report.

UBS AG third quarter 2023 report |

Appendix 76

Abbreviations frequently used in our financial reports

A

ABS asset-backed securities

AG Aktiengesellschaft

AGM Annual General Meeting of

shareholders

A-IRB advanced internal ratings-

based

AIV alternative investment

vehicle

ALCO Asset and Liability

Committee

AMA advanced measurement

approach

AML anti-money laundering

AoA Articles of Association

APM alternative performance

measure

ARR alternative reference rate

ARS auction rate securities

ASF available stable funding

AT1 additional tier 1

AuM assets under management

B

BCBS Basel Committee on

Banking Supervision

BIS Bank for International

Settlements

BoD Board of Directors

C

CAO Capital Adequacy

Ordinance

CCAR Comprehensive Capital

Analysis and Review

CCF credit conversion factor

CCP central counterparty

CCR counterparty credit risk

CCRC Corporate Culture and

Responsibility Committee

CDS credit default swap

CEA Commodity Exchange Act

CEO Chief Executive Officer

CET1 common equity tier 1

CFO Chief Financial Officer

CGU cash-generating unit

CHF Swiss franc

CIO Chief Investment Office

C&ORC Compliance & Operational

Risk Control

CRM credit risk mitigation (credit

risk) or comprehensive risk

measure (market risk)

CST combined stress test

CUSIP Committee on Uniform

Security Identification

Procedures

CVA credit valuation adjustment

D

DBO defined benefit obligation

DCCP Deferred Contingent

Capital Plan 

DE&I diversity, equity and

inclusion

DFAST Dodd–Frank Act Stress Test

DM discount margin

DOJ US Department of Justice

DTA deferred tax asset

DVA debit valuation adjustment

E

EAD exposure at default

EB Executive Board

EC European Commission

ECB European Central Bank

ECL expected credit loss

EGM Extraordinary General

Meeting of shareholders

EIR effective interest rate

EL expected loss

EMEA Europe, Middle East and

Africa

EOP Equity Ownership Plan

EPS earnings per share

ESG environmental, social and

governance

ESR environmental and social

risk

ETD exchange-traded derivatives

ETF exchange-traded fund

EU European Union

EUR euro

EURIBOR Euro Interbank Offered Rate

EVE economic value of equity

EY Ernst & Young Ltd

F

FA financial advisor

FCA UK Financial Conduct

Authority

FDIC Federal Deposit Insurance

Corporation

FINMA Swiss Financial Market

Supervisory Authority

FMIA Swiss Financial Market

Infrastructure Act

FSB Financial Stability Board

FTA Swiss Federal Tax

Administration

FVA funding valuation

adjustment

FVOCI fair value through other

comprehensive income

FVTPL fair value through profit or

loss

FX foreign exchange

G

GAAP generally accepted

accounting principles

GBP pound sterling

GCRG Group Compliance,

Regulatory & Governance

GDP gross domestic product

GEB Group Executive Board

GHG greenhouse gas

GIA Group Internal Audit

GRI Global Reporting Initiative

G-SIB global systemically

important bank

H

HQLA

high-quality liquid assets

I

IAS International Accounting

Standards

IASB International Accounting

Standards Board

IBOR interbank offered rate

IFRIC International Financial

Reporting Interpretations

Committee

IFRS International Financial

Reporting Standards

IRB internal ratings-based

IRRBB interest rate risk in the

banking book

ISDA International Swaps and

Derivatives Association

ISIN International Securities

Identification Number

UBS AG third quarter 2023 report |

Appendix 77

Abbreviations frequently used in our financial reports (continued)

K

KRT Key Risk Taker

L

LAS liquidity-adjusted stress

LCR liquidity coverage ratio

LGD loss given default

LIBOR London Interbank Offered

Rate

LLC limited liability company

LoD lines of defense

LRD leverage ratio denominator

LTIP Long-Term Incentive Plan

LTV loan-to-value

M

M&A mergers and acquisitions

MRT Material Risk Taker

N

NII net interest income

NSFR net stable funding ratio

NYSE New York Stock Exchange

O

OCA own credit adjustment

OCI other comprehensive

income

OECD Organisation for Economic

Co-operation and

Development

OTC over-the-counter

P

PCI purchased credit impaired

PD probability of default

PIT point in time

PPA purchase price allocation

P&L profit or loss

Q

QCCP Qualifying central

counterparty

R

RBC risk-based capital

RbM risk-based monitoring

REIT real estate investment trust

RMBS residential mortgage-

backed securities

RniV risks not in VaR

RoCET1 return on CET1 capital

RoU right-of-use

rTSR relative total shareholder

return

RWA risk-weighted assets

S

SA standardized approach or

société anonyme

SA-CCR standardized approach for

counterparty credit risk

SAR Special Administrative

Region of the People’s

Republic of China

SDG Sustainable Development

Goal

SEC US Securities and Exchange

Commission

SFT securities financing

transaction

SI sustainable investing or

sustainable investment

SIBOR Singapore Interbank

Offered Rate

SICR significant increase in credit

risk

SIX SIX Swiss Exchange

SME small and medium-sized

entities

SMF Senior Management

Function

SNB Swiss National Bank

SOR Singapore Swap Offer Rate

SPPI solely payments of principal

and interest

SRB systemically relevant bank

SRM specific risk measure

SVaR stressed value-at-risk

T

TBTF too big to fail

TCFD Task Force on Climate-

related Financial Disclosures

TIBOR Tokyo Interbank Offered

Rate

TLAC total loss-absorbing capacity

TTC through the cycle

U

USD US dollar

V

VaR value-at-risk

VAT

value added tax

This is a general list of the abbreviations frequently used in our financial reporting. Not all of the listed abbreviations

may appear in this particular report.

UBS AG third quarter 2023 report |

Appendix 78

Information sources 

Reporting publications

Annual publications

Annual Report

: Published in English, this single-volume report provides descriptions of: the Group strategy and

performance; the strategy and performance of the business divisions and Group Items; risk, treasury and capital

management; corporate governance, corporate responsibility and the compensation framework, including

information about compensation for the Board of Directors and the Group Executive Board members; and financial

information, including the financial statements. 

“Auszug aus dem Geschäftsbericht

”: This publication provides a German translation of selected sections of the

Annual Report. 

Compensation Report

: This report discusses the compensation framework and provides information about

compensation for the Board of Directors and the Group Executive Board members. It is available in English and

German (

“Vergütungsbericht

”) and represents a component of the Annual Report.

Sustainability Report

: Published in English, the Sustainability Report provides disclosures on environmental, social

and governance topics related to the UBS Group.

Diversity, Equity and Inclusion Report

: This report details UBS’s diversity, equity and inclusion priority areas of focus,

strategic goals and approach to achieving them.

Quarterly publications 

Quarterly financial report

: This report provides an update on performance and strategy (where applicable) for the

respective quarter. It is available in English.

The annual and quarterly publications are available in .pdf and online formats at

ubs.com/investors

, under “Financial

information.” Starting with the Annual Report 2022, printed copies, in any language, of the aforementioned annual

publications are no longer provided. 

Other information

Website

The “Investor Relations” website at

ubs.com/investors

 provides the following information about UBS: results-related

news releases; financial information, including results-related filings with the US Securities and Exchange

Commission (the SEC); information for shareholders, including UBS share price charts, as well as data and dividend

information, and for bondholders; the corporate calendar; and presentations by management for investors and

financial analysts. Information is available online in English, with some information also available in German.

Results presentations

Quarterly results presentations are webcast live. Recordings of most presentations can be downloaded from

ubs.com/presentations

.

Messaging service

Email alerts to news about UBS can be subscribed for under “UBS News Alert” at

ubs.com/global/en/investor-

relations/contact/investor-services.html

. Messages are sent in English, German, French or Italian, with an option to

select theme preferences for such alerts.

Form 20-F and other submissions to the US Securities and Exchange Commission

UBS files periodic reports with and submits other information to the SEC. Principal among these filings is the annual

report on Form 20-F, filed pursuant to the US Securities Exchange Act of 1934. The filing of Form 20-F is structured

as a wraparound document. Most sections of the filing can be satisfied by referring to the combined UBS Group AG

and UBS AG Annual Report. However, there is a small amount of additional information in Form 20-F that is not

presented elsewhere and is particularly targeted at readers in the US. Readers are encouraged to refer to this

additional disclosure. Any document that filed with the SEC is available on the SEC’s website:

sec.gov

. Refer to

ubs.com/investors

 for more information.

UBS AG third quarter 2023 report |

Appendix 79

Cautionary Statement Regarding Forward-Looking Statements |

 This report contains statements that constitute “forward-looking statements,” including

but not limited to management’s outlook for UBS’s financial performance, statements relating to the anticipated effect of transactions and strategic initiatives

on UBS’s business and future development and goals or intentions to achieve climate, sustainability and other social objectives. While these forward-looking

statements represent UBS’s judgments, expectations and objectives concerning the matters described, a number of risks, uncertainties and other important

factors could cause actual developments and results to differ materially from UBS’s expectations. In particular, recent terrorist activity and escalating armed

conflict in the middle east, as well as the continuing Russia–Ukraine war, may have significant impacts on global markets, exacerbate global inflationary pressures,

and slow global growth. In addition, the ongoing conflicts may continue to cause significant population displacement, and lead to shortages of vital commodities,

including energy shortages and food insecurity outside the areas immediately involved in armed conflict. Governmental responses to the 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. UBS’s acquisition of Credit Suisse has materially changed our outlook and strategic

direction and introduced new operational challenges. The integration of the Credit Suisse entities into the UBS structure is expected to take between three and

five years and presents significant risks, including the risks that UBS Group AG may be unable to achieve the cost reductions and other benefits contemplated by

the transaction. This creates significantly greater uncertainty about forward-looking statements. Other factors that may affect our performance and ability to

achieve our plans, outlook and other objectives also include, but are not limited to: (i) the degree to which UBS is successful in the execution of its strategic plans,

including its cost reduction and efficiency initiatives and its ability to manage its levels of risk-weighted assets (RWA) and leverage ratio denominator (LRD),

liquidity coverage ratio and other financial resources, including changes in RWA assets and liabilities arising from higher market volatility and the size of the

combined bank; (ii) the degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory and other conditions,

including as a result of the acquisition of Credit Suisse; (iii) increased inflation and interest rate volatility in major markets; (iv) developments in the macroeconomic

climate and in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, currency exchange

rates, deterioration or slow recovery in residential and commercial real estate markets, the effects of economic conditions, including increasing inflationary

pressures, market developments, increasing geopolitical tensions, and changes to national trade policies on the financial position or creditworthiness of UBS’s

clients and counterparties, as well as on client sentiment and levels of activity, including the COVID-19 pandemic and the measures taken to manage it, which

have had and may also continue to have a significant adverse effect on global and regional economic activity, including disruptions to global supply chains and

labor market displacements; (v) changes in the availability of capital and funding, including any adverse changes in UBS’s credit spreads and credit ratings of UBS,

Credit Suisse, sovereign issuers, structured credit products or credit-related exposures, as well as availability and cost of funding to meet requirements for debt

eligible for total loss-absorbing capacity (TLAC), in particular in light of the acquisition of Credit Suisse; (vi) changes in central bank policies or the implementation

of financial legislation and regulation in Switzerland, the US, the UK, the European Union and other financial centers that have imposed, or resulted in, or may

do so in the future, more stringent or entity-specific capital, TLAC, leverage ratio, net stable funding ratio, liquidity and funding requirements, heightened

operational resilience requirements, incremental tax requirements, additional levies, limitations on permitted activities, constraints on remuneration, constraints

on transfers of capital and liquidity and sharing of operational costs across the Group or other measures, and the effect these will or would have on UBS’s

business activities; (vii) UBS’s ability to successfully implement resolvability and related regulatory requirements and the potential need to make further changes

to the legal structure or booking model of UBS in response to legal and regulatory requirements and any additional requirements due to its acquisition of Credit

Suisse, or other developments; (viii) UBS’s ability to maintain and improve its systems and controls for complying with sanctions in a timely manner and for the

detection and prevention of money laundering to meet evolving regulatory requirements and expectations, in particular in current geopolitical turmoil; (ix) the

uncertainty arising from domestic stresses in certain major economies; (x) changes in UBS’s competitive position, including whether differences in regulatory

capital and other requirements among the major financial centers adversely affect UBS’s ability to compete in certain lines of business; (xi) changes in the standards

of conduct applicable to our businesses that may result from new regulations or new enforcement of existing standards, including measures to impose new and

enhanced duties when interacting with customers and in the execution and handling of customer transactions; (xii) the liability to which UBS may be exposed,

or possible constraints or sanctions that regulatory authorities might impose on UBS, due to litigation, contractual claims and regulatory investigations, including

the potential for disqualification from certain businesses, potentially large fines or monetary penalties, or the loss of licenses or privileges as a result of regulatory

or other governmental sanctions, as well as the effect that litigation, regulatory and similar matters have on the operational risk component of our RWA, including

as a result of its acquisition of Credit Suisse, as well as the amount of capital available for return to shareholders; (xiii) the effects on UBS’s business, in particular

cross-border banking, of sanctions, tax or regulatory developments and of possible changes in UBS’s policies and practices; (xiv) UBS’s ability to retain and attract

the employees necessary to generate revenues and to manage, support and control its businesses, which may be affected by competitive factors; (xv) changes in

accounting or tax standards or policies, and determinations or interpretations affecting the recognition of gain or loss, the valuation of goodwill, the recognition

of deferred tax assets and other matters; (xvi) UBS’s ability to implement new technologies and business methods, including digital services and technologies,

and ability to successfully compete with both existing and new financial service providers, some of which may not be regulated to the same extent; (xvii) limitations

on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (xviii) the

occurrence of operational failures, such as fraud, misconduct, unauthorized trading, financial crime, cyberattacks, data leakage and systems failures, the risk of

which is increased with cyberattack threats from both nation states and non-nation-state actors targeting financial institutions; (xix) restrictions on the ability of

UBS Group AG to make payments or distributions, including due to restrictions on the ability of its subsidiaries to make loans or distributions, directly or indirectly,

or, in the case of financial difficulties, due to the exercise by FINMA or the regulators of UBS’s operations in other countries of their broad statutory powers in

relation to protective measures, restructuring and liquidation proceedings; (xx) the degree to which changes in regulation, capital or legal structure, financial

results or other factors may affect UBS’s ability to maintain its stated capital return objective; (xxi) uncertainty over the scope of actions that may be required by

UBS, governments and others for UBS to achieve goals relating to climate, environmental and social matters, as well as the evolving nature of underlying science

and industry and the possibility of conflict between different governmental standards and regulatory regimes; (xxii) the ability of UBS to access capital markets;

(xxiii) the ability of UBS to successfully recover from a disaster or other business continuity problem due to a hurricane, flood, earthquake, terrorist attack, war,

conflict (e.g., the Russia–Ukraine war), pandemic, security breach, cyberattack, power loss, telecommunications failure or other natural or man-made event,

including the ability to function remotely during long-term disruptions such as the COVID-19 (coronavirus) pandemic; (xxiv) the level of success in the absorption

of Credit Suisse, in the integration of the two groups and their businesses, and in the execution of the planned strategy regarding cost reduction and divestment

of any non-core assets, the existing assets and liabilities currently existing in the Credit Suisse Group, the level of resulting impairments and write-downs, the

effect of the consummation of the integration on the operational results, share price and credit rating of UBS – delays, difficulties, or failure in closing the

transaction may cause market disruption and challenges for UBS to maintain business, contractual and operational relationships; and (xxv) the effect that these

or other factors or unanticipated events, including media reports and speculations, may have on our reputation and the additional consequences that this may

have on our business and performance. The sequence in which the factors above are presented is not indicative of their likelihood of occurrence or the potential

magnitude of their consequences. Our business and financial performance could be affected by other factors identified in our past and future filings and reports,

including those filed with the US Securities and Exchange Commission (the SEC). More detailed information about those factors is set forth in documents

furnished by UBS and filings made by UBS with the SEC, including the Annual Report on Form 20-F for the year ended 31 December 2022. UBS is not under any

obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or

otherwise.

Rounding |

 Numbers presented throughout this report may not add up precisely to the totals provided in the tables and text. Percentages and percent changes

disclosed in text and tables are calculated on the basis of unrounded figures. Absolute changes between reporting periods disclosed in the text, which can be

derived from numbers presented in related tables, are calculated on a rounded basis.

Tables |

 Within tables, blank fields generally indicate non-applicability or that presentation of any content would not be meaningful, or that information is not

available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Values

that are zero on a rounded basis can be either negative or positive on an actual basis.

UBS AG

P.O. Box, CH-8098 Zurich

P.O. Box, CH-4002 Basel

ubs.com

This Form 6-K is hereby incorporated by reference into (1) each of the registration statements of UBS AG on Form

F-3 (Registration Number 333-263376), and into each prospectus outstanding under any of the foregoing registration

statements, (2) any outstanding offering circular or similar document issued or authorized by UBS AG that

incorporates by reference any Forms 6-K of UBS AG that are incorporated into its registration statements filed with

the SEC, and (3) the base prospectus of Corporate Asset Backed Corporation (“CABCO”) dated June 23, 2004

(Registration Number 333-111572), the Form 8-K of CABCO filed and dated June 23, 2004 (SEC File Number 001-

13444), and the Prospectus Supplements relating to the CABCO Series 2004-101 Trust dated May 10, 2004 and May

17, 2004 (Registration Number 033-91744 and 033-91744-05).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized.

UBS AG

By: /s/ Sergio Ermotti 

_

Name: Sergio Ermotti

Title: President of the Executive Board

By: /s/ Todd Tuckner 

_

Name: Todd Tuckner

Title: Chief Financial Officer

By: /s/ Steffen Henrich 

______________

Name: Steffen Henrich

Title: Controller

Date: November 7, 2023