Hedge accounting	12 Months Ended
Hedge accounting	Dec. 31, 2023
Disclosure Of Hedge Accounting [Line Items]
Disclosure Of General Hedge Accounting Explanatory	Note 26 Hedge accounting Derivatives designated in hedge accounting relationships The Group applies hedge accounting to interest rate risk and foreign exchange risk, including structural foreign exchange risk related to net investments in foreign operations. › Refer to “Market risk” in the “Risk management and control” section of this report for more information about how risks arise and how they are managed by the Group Hedging instruments and hedged risk Interest rate swaps are designated in fair value hedges or cash flow hedges of interest rate risk arising solely from changes in benchmark interest rates. Fair value changes arising from such risk are usually the largest component of the overall change in the fair value of the hedged position in transaction currency. Cross-currency swaps are designated as fair value hedges of foreign exchange risk. Foreign exchange forwards and foreign exchange swaps are mainly designated as hedges of structural foreign exchange risk related to net investments in foreign operations. In both cases the hedged risk arises solely from changes in the spot foreign exchange rate. The notional of the designated hedging instruments matches the notional of the hedged items, except when the interest rate swaps are designated in cash flow hedges after the trade date, in which case the hedge ratio designated is determined based on the swap sensitivity. Hedged items and hedge designation Fair value hedges of interest rate risk related to debt instruments and loan assets Fair value hedges of interest rate risk related to debt instruments and loan assets involve swapping fixed cash flows associated with loans to customers (including long-term fixed-rate mortgage loans in Swiss francs), debt securities held, customer deposits, or debt issued to floating cash flows by entering into interest rate swaps that either pay fixed and receive floating cash flows or that receive fixed and pay floating cash flows. The floating future cash flows are based on the following benchmark rates: Secured Overnight Financing Rate (SOFR), Effective Federal Funds Rate (EFFR), Swiss Average Rate Overnight (SARON), Euro Interbank Offered Rate (EURIBOR), Euro Short-Term Rate (ESTR), Sterling Overnight Index Average (SONIA), AUD London Interbank Offered Rate (AUD LIBOR), Tokyo Overnight Average Rate (TONA), Singapore Overnight Rate Average (SORA) and Norwegian Krona Overnight Index Swap (NOK OIS). Cash flow hedges of forecast transactions The Group hedges forecast cash flows on non-trading financial assets and liabilities that bear interest at variable rates or are expected to be refinanced or reinvested in the future, due to movements in future market rates. The amounts and timing of future cash flows, representing both principal and interest flows, are projected on the basis of contractual terms and other relevant factors, including estimates of prepayments and defaults. The aggregate principal balances and interest cash flows across all portfolios over time form the basis for identifying the non-trading interest rate risk of the Group, which is hedged with interest rate swaps, the maximum maturity of which is 15 years. Cash flow forecasts and risk exposures are monitored and adjusted on an ongoing basis, and consequently additional hedging instruments are traded and designated, or are terminated resulting in a hedge discontinuance. Fair value hedges of foreign exchange risk related to issued debt instruments Debt instruments denominated in currencies other than the US dollar are designated in fair value hedges of spot foreign exchange risk, in addition to and separate from the fair value hedges of interest rate risk. Cross-currency swaps economically convert debt instruments denominated in currencies other than the US dollar to US dollars. The hedge designations also involve intragroup debt instruments that are eliminated upon consolidation but FX gains and losses impact consolidated profit or loss. Hedges of net investments in foreign operations The Group applies hedge accounting for certain net investments in foreign operations, which include subsidiaries, branches and associates. Upon maturity of hedging instruments, typically one to three months, the hedge relationship is terminated and new designations are made to reflect any changes in the net investments in foreign operations. Economic relationship between hedged item and hedging instrument The economic relationship between the hedged item and the hedging instrument is determined based on a qualitative analysis of their critical terms. In cases where hedge designation takes place after the trade date of the hedging instrument, a quantitative analysis of the possible behavior of the hedging derivative and the hedged item during their respective terms is also performed. Sources of hedge ineffectiveness In hedges of interest rate risk, hedge ineffectiveness can arise from mismatches of critical terms and / or the use of different curves to discount the hedged item and instrument, or from entering into a hedge relationship after the trade date of the hedging derivative. In hedges of foreign exchange risk related to debt issued, hedge ineffectiveness can arise due to the discounting of the hedging instruments and undesignated risk components and lack of such discounting and risk components in the hedged items. In hedges of net investments in foreign operations, ineffectiveness is unlikely unless the hedged net assets fall below the designated hedged amount. The exceptions are hedges where the hedging currency is not the same as the currency of the foreign operation, where the currency basis may cause ineffectiveness. Hedge ineffectiveness from financial instruments measured at fair value through profit or loss is recognized in Other net income from financial instruments measured at fair value through profit or loss. Derivatives not designated in hedge accounting relationships Non-hedge-accounted derivatives are mandatorily held for trading with all fair value movements taken to Other net income from financial instruments measured at fair value through profit or loss , even when held as an economic hedge or to facilitate client clearing. The one exception relates to forward points on certain short- and long-duration foreign exchange contracts acting as economic hedges, which are reported in Net interest income. All hedges: designated hedging instruments and hedge ineffectiveness As of or for the year ended 31.12.23 Carrying amount USD m Notional amount Derivative financial assets Derivative financial liabilities Changes in fair value of hedging instruments 1 Changes in fair value of hedged items 1 Hedge ineffectiveness recognized in the income statement Interest rate risk Fair value hedges 246,909 3 51 2,275 (2,311) (36) Cash flow hedges 97,834 3 0 (337) 358 21 Foreign exchange risk Fair value hedges 2 33,877 468 291 132 (151) (19) Hedges of net investments in foreign operations 38,668 17 1,270 (2,317) 2,320 3 As of or for the year ended 31.12.22 Carrying amount USD m Notional amount Derivative financial assets Derivative financial liabilities Changes in fair value of hedging instruments 1 Changes in fair value of hedged items 1 Hedge ineffectiveness recognized in the income statement Interest rate risk Fair value hedges 92,415 0 0 (5,195) 5,169 (27) Cash flow hedges 75,304 2 5 (5,813) 5,760 (53) Foreign exchange risk Fair value hedges 2 20,566 845 3 (1,088) 1,105 18 Hedges of net investments in foreign operations 14,009 7 529 336 (337) (1) 1 Amounts used as the basis for recognizing hedge ineffectiveness for the period. 2 The foreign currency basis spread of cross-currency swaps designated as hedging derivatives is excluded from the hedge accounting designation and accounted for as a cost of hedging with amounts deferred in Other comprehensive income within Equity. Fair value hedges: designated hedged items recognized on balance sheet 1 USD m 31.12.23 31.12.22 Interest rate risk FX risk Interest rate risk FX risk Loans and advances to customers Carrying amount of designated loans 61,107 14,270 of which: accumulated amount of fair value hedge adjustment 457 (1,249) of which: accumulated amount of fair value hedge adjustment subject to amortization attributable to the portion of the portfolio that ceased to be part of hedge accounting (179) (51) Other financial assets measured at amortized cost – debt securities Carrying amount of designated debt securities 6,333 4,577 of which: accumulated amount of fair value hedge adjustment (109) (180) Customer deposits Carrying amount of customer deposits 8,972 of which: accumulated amount of fair value hedge adjustment 50 Debt issued measured at amortized cost Carrying amount of designated debt issued 156,507 22,329 68,529 20,566 of which: accumulated amount of fair value hedge adjustment (2,976) (6,057) 1 In addition, as of 31 December 2023 UBS designated in fair value hedges of FX risk USD 12 bn of intragroup debt instruments which are not recognized on consolidated balance sheet but FX gains and losses on these instruments impact consolidated profit or loss. No such designations were in place as of 31 December 2022. Fair value hedges: profile of the timing of the nominal amount of the hedging instrument 31.12.23 USD bn Due within 1 month Due between 1 and 3 months Due between 3 and 12 months Due between 1 and 5 years Due after 5 years Total Interest rate swaps 1 7 29 142 68 247 Cross-currency swaps 1 2 2 22 7 34 31.12.22 USD bn Due within 1 month Due between 1 and 3 months Due between 3 and 12 months Due between 1 and 5 years Due after 5 years Total Interest rate swaps 0 4 10 53 26 92 Cross-currency swaps 0 1 2 12 5 21 Cash flow hedge reserve on a pre-tax basis USD m 31.12.23 31.12.22 Amounts related to hedge relationships for which hedge accounting continues to be applied (2,319) (4,692) Amounts related to hedge relationships for which hedge accounting is no longer applied (1,487) (540) Total other comprehensive income recognized directly in equity related to cash flow hedges, on a pre-tax basis (3,806) (5,232) Foreign currency translation reserve on a pre-tax basis USD m 31.12.23 31.12.22 Amounts related to hedge relationships for which hedge accounting continues to be applied (2,063) 284 Amounts related to hedge relationships for which hedge accounting is no longer applied 266 266 Total other comprehensive income recognized directly in equity related to hedging instruments designated as net investment hedges, on a pre-tax basis (1,798) 550 Interest rate benchmark reform In 2023, the Group applied the relief provided by Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) , published by the International Accounting Standards Board in September 2019, to its hedges in US dollars and Singapore dollars until they transitioned to alternative reference rate (ARR) designations in May 2023 and June 2023, respectively. The transition of fair value hedges took place following the IBOR transition for swaps with LCH (formerly the London Clearing House), with hedge relationships continuing in accordance with Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) . Cash flow hedge relationships were discontinued and replaced with new ARR designations in May 2023. As of 31 December 2023, there were no hedge relationships where the designated risk is LIBOR and maturing after the cessation date of the applicable interest rate benchmarks. The table below provides details on the hedging instruments in such hedge relationships as of 31 December 2022. Hedges of net investments in foreign operations are not affected by the amendments. › Refer to Note 1a item 2j for more information about the relief provided by the amendments to IFRS 9 and IFRS 7 related to interest rate benchmark reform › Refer to Note 25 for more information about the transition progress Hedging instruments referencing LIBOR 31.12.22 Carrying amount USD m Notional amount Derivative financial assets Derivative financial liabilities Interest rate risk Fair value hedges 20,383 0 0 Cash flow hedges 2,179 0 0