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Changes in accounting policies, comparability and adjustments
 6 Months Ended
Jun. 30, 2022
Entity [Table]  
Disclosure of voluntary change in accounting policy
Changes to the presentation
 
of the financial statements
 
Effective
 
from the
 
second
 
quarter
 
of 2022,
 
UBS
 
has made
 
several changes
 
to simplify
 
the presentation
 
of the
 
income
statement alongside other primary
 
financial statements and
 
disclosure notes and to align them with management
information.
 
In
 
particular,
Total
 
operating
 
income
 
has
 
been
 
renamed
Total
 
revenues
 
and
 
excludes
Credit
 
loss
(expense)
 
/ release
, which is now separately
 
presented below
Total revenues
.
Disclosure of reclassification of financial assets [text block]
Reclassification of a portfolio
 
from
Financial assets
 
measured at fair value
 
through other
comprehensive
 
income to
Other financial assets
 
measured at
 
amortized cost
 
Effective from
 
1 April 2022,
 
UBS has reclassified
 
a portfolio
 
of financial
 
assets from
Financial assets
 
measured
 
at fair
value through
 
other comprehensive
 
income
 
(FVOCI) with
 
a fair value
 
of USD
6.9
bn (the
 
Portfolio)
 
to
Other financial
assets
 
measured at
 
amortized cost
 
in
 
line
 
with
 
the
 
principles in
 
IFRS 9,
Financial
 
Instruments
,
 
which
 
require a
reclassification when an
 
entity changes
 
its business model
 
for managing financial
 
assets.
The Portfolio’s cumulative
 
fair value losses of USD
449
m pre-tax and USD
333
m post-tax, previously recognized
 
in
Other comprehensive
 
income
, have been removed from equity
 
and adjusted against the value of the assets
 
at the
reclassification date,
 
so that the Portfolio is
 
measured as if the assets
 
had always been classified
 
at amortized cost,
with a value as of 1 April
 
2022 of USD
7.4
bn.
 
The reclassification had
 
no effect on the income
 
statement.
 
The
 
reclassified
 
Portfolio
 
is
 
made
 
up
 
of
 
high-quality
 
liquid
 
assets,
 
primarily
 
US
 
government
 
treasuries
 
and
 
US
government agency
 
mortgage-backed securities,
 
held and separately managed
 
by UBS Bank USA (BUSA).
The
 
accounting
 
reclassification
 
has
 
arisen
 
as
 
a
 
direct
 
result
 
of
 
the
 
transformation
 
of
 
UBS’s
 
Global
 
Wealth
Management Americas
 
business that
 
has
 
significantly impacted
 
BUSA. Th
 
is includes
 
initiatives approved
 
by
 
the
Group Executive
 
Board to
 
significantly
 
grow and
 
extend the
 
business, as
 
disclosed
 
on 1 February
 
2022 during
 
UBS’s
fourth quarter 2021 earnings presentation, along with UBS’s
 
decision to acquire Wealthfront, an industry-leading
digital wealth management provider. BUSA’s
 
deposit base has
 
grown by more
 
than 100% in
 
the last
 
two years,
generating substantial
 
cash balances,
 
with a
 
number of new
 
products being
 
launched, including
 
new deposit
 
types
that are longer in duration,
 
additional lending
 
and a broader range
 
of customer segments targeted.
Following the
 
commencement of these
 
activities and
 
the announcement made
 
in
 
the first
 
quarter of
 
2022, the
Portfolio is
 
no longer
 
held in
 
a business
 
model to
 
collect the
 
contractual cash
 
flows and
 
sell the
 
assets, but
 
is instead
solely held to collect the contractual cash flows until the assets
 
mature,
 
requiring a reclassification
 
of the Portfolio
in line with IFRS 9
 
with effect
 
from 1 April 2022.
The fair
 
value of the
 
Portfolio as of
 
30 June 2022
 
was USD
6.4
bn. A
 
pre-tax fair value
 
loss of
 
USD
264
m would
have been recognized in
Other comprehensive
 
income
 
during the second quarter of 2022 if the Portfolio had not
been reclassified.