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MD&A - Capital management
 12 Months Ended
Dec. 31, 2024
MDA Capital Management [Line Items]  
Disclosure Of Objectives Policies And Processes For Managing Capital Explanatory
We manage our balance sheet, RWA, LRD and TLAC ratio levels based on our regulatory requirements,
 
within our
internal limits and targets, and our externally provided guidance.
These resource
 
allocations are
 
based on
 
our business
 
plans and
 
earnings projections,
 
which are
 
reflected in
 
our
capital
 
plans.
 
The
 
equity
 
double
 
leverage
 
ratio
 
at
 
the
 
UBS
 
Group AG
 
standalone
 
level
 
(calculated
 
as
 
investments
 
in
subsidiaries divided by total
 
equity) is a key
 
consideration when planning for
 
distributions from UBS AG to
 
UBS Group AG
and from UBS Group AG to its shareholders.
The annual
 
strategic planning
 
process includes
 
a capital
 
planning component
 
that is
 
key in
 
defining our
 
target capital
levels and
 
returns. The
 
capital planning
 
component is
 
based on
 
an attribution
 
of Group
 
RWA and
 
LRD capacity
 
to the
business divisions.
 
Limits and targets are
 
established at the Group
 
and business-division levels and
 
are approved by the
 
BoD at least annually.
In
 
the
 
target-setting
 
process
 
we
 
take
 
into
 
account,
 
among
 
other
 
factors,
 
the
 
current
 
and
 
potential
 
future
 
TLAC
requirements,
 
our
 
aggregate
 
risk
 
exposure
 
in
 
terms
 
of
 
the
 
combined
 
stress
 
test
 
(the
 
CST)
 
and
 
the
 
effect
 
of
 
expected
accounting policy changes.
An adequate level of
 
common equity tier 1
 
(CET1) capital and total
 
loss-absorbing capacity (TLAC)
 
meeting both
internal assessment and regulatory requirements
 
is a prerequisite for conducting our
 
business activities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital
USD m
31.12.24
31.12.23
1
Total equity under IFRS Accounting Standards
85,574
86,156
Equity attributable to non-controlling interests
(494)
(531)
Defined benefit plans, net of tax
(833)
(965)
Deferred tax assets recognized for tax loss carry-forwards
(2,288)
(3,039)
Deferred tax assets for unused tax credits
(688)
(97)
Deferred tax assets on temporary differences, excess over threshold
(803)
Goodwill, net of tax
2
(5,702)
(5,750)
Intangible assets, net of tax
(702)
(894)
Compensation-related components (not recognized in net profit)
(2,800)
(2,186)
Expected losses on advanced internal ratings-based portfolio less provisions
(568)
(713)
Unrealized (gains) / losses from cash flow hedges, net of tax
2,585
3,109
Own credit related to (gains) / losses on financial liabilities
 
measured at fair value that existed at the balance sheet date, net of tax
1,178
1,291
Own credit related to (gains) / losses on derivative financial instruments
 
that existed at the balance sheet date
(62)
(89)
Prudential valuation adjustments
(167)
(368)
Accruals for dividends to shareholders
(2,835)
(2,240)
Transitional CET1 capital PPA adjustments, net of tax
4,316
Other
(25)
3
Total common equity tier 1 capital
71,367
78,002
1 Comparative-period information has been revised. Refer
 
to “Note 2 Accounting for the acquisition of the Credit
 
Suisse Group” in the “Consolidated financial statements” section
 
of this report for more information.
 
2 Includes goodwill related to significant investments in financial institutions of USD
19
m as of 31 December 2024 (31 December 2023: USD
20
m) presented on the balance sheet line Investments in associates.
Our CET1
 
capital
 
mainly
 
consists
 
of: share
 
capital;
 
share premium,
 
which primarily
 
consists
 
of additional
 
paid-in capital
related to
 
shares issued;
 
and retained
 
earnings.
 
A detailed
 
reconciliation
 
of equity
 
under IFRS
 
Accounting
 
Standards to
 
CET1
capital is provided
 
in the
 
“Reconciliation of equity under IFRS
 
Accounting Standards to Swiss
 
SRB common equity
 
tier 1
capital” table.
 
Our CET1 capital decreased by USD
6.6
bn to USD
71.4
bn as of 31 December 2024, mainly as operating
 
profit before tax
of USD
6.8
bn was more than offset by regular and voluntary amortization of the remaining transitional CET1 capital PPA
adjustments
 
of
 
USD
4.3
bn
 
(net
 
of
 
tax),
 
dividend
 
accruals
 
of
 
USD
2.8
bn,
 
current
 
tax
 
expenses
 
of
 
USD
2.2
bn,
 
foreign
currency
 
translation
 
losses
 
of
 
USD
1.8
bn,
 
a
 
negative
 
effect
 
from
 
compensation-
 
and
 
own-share-related
 
capital
components of USD
1.4
bn, and share repurchases of USD
1.0
bn under our 2024 share repurchase program.
›
Refer to “UBS shares” in this section for more information about
 
our share repurchase programs
Our loss-absorbing
 
AT1 capital
 
increased by
 
USD
2.5
bn to
 
USD
16.4
bn, mainly
 
reflecting new
 
issuances of
 
AT1 capital
instruments of USD
3.5
bn partly offset by a call of USD
1.0
bn equivalent of AT1 capital instruments.
Our total gone concern loss-absorbing capacity
 
decreased by
 
USD
9.5
bn to
 
USD
97.7
bn as of 31 December 2024
and included
 
USD
97.4
bn of TLAC-eligible
 
senior unsecured
 
debt.