UBS

3Q18 PBT +37% YoY to CHF 1.7bn

Regulatory News:

UBS delivered strong third-quarter results with reported profit before tax (PBT) up 37% year over year (YoY) to CHF 1,668m and adjusted² PBT up 15% to CHF 1,733m. Cost/income ratio of 77% was down 6 percentage points YoY; on an adjusted² basis, it was down 3 percentage points to 76%. Net profit attributable to shareholders was CHF 1,246m, up 32% from the third quarter of 2017. Adjusted² return on tangible equity (RoTE) excluding DTAs³ was 15.7% for the quarter, a 2.4 percentage point increase YoY.

Global Wealth Management’s PBT increased by 3% YoY to CHF 932m, with income and expenses both increasing by 2%. Recurring net fee income and net interest income both increased YoY on a new high for invested assets, further progress on mandate penetration, as well as increased net interest margin on deposits and higher loan volumes, while transaction-based revenues declined on lower client activity. Personal & Corporate Banking PBT was CHF 413m, as growth in recurring net fee income offset the ongoing pressure from the negative interest rate environment; net new business volume growth remained strong. Asset Management reported PBT of CHF 120m, as the positive effects of higher invested assets partly offset the impact of a prior-period business sale and pressure on margins; invested assets rose to CHF 815bn, the highest in a decade. The Investment Bank delivered PBT of CHF 472m and an adjusted² return on attributed equity of 21%, on strong revenue growth in Equities and Foreign Exchange, Rates and Credit (FRC) and continued resource discipline.

During the third quarter, UBS repurchased CHF 100m of its own shares, taking total purchases to CHF 650m for this year, above the 2018 target of CHF 550m. UBS’s capital position remains strong, with a CET1 capital ratio of 13.5%, a CET1 leverage ratio of 3.80%, a tier 1 (going concern) leverage ratio of 5.0%, and total loss-absorbing capacity of over CHF 80bn.

“Our results for the quarter once again highlight the benefits of our diversification. They also demonstrate that we are pursuing a focused strategy in each of our business divisions, creating value for our clients and shareholders.”
Sergio P. Ermotti, Group Chief Executive Officer

Beginning in the fourth quarter of 2018, UBS Group AG will change its presentation currency to US dollars following changes in the functional currencies of UBS Group AG (formerly CHF), UBS AG’s Swiss Head Office (formerly CHF) and its London Branch operations (formerly GBP). There will be no material changes to prior-period profit and loss or total equity attributable to UBS shareholders; future net interest income is expected to increase by around USD 0.3bn annually from 2019.

UBS expects to remeasure DTAs in the US and Switzerland in the fourth quarter of 2018, and offer new guidance on deferred tax recognition in the income statement at that point, with limited expected net impact on net profit after tax, IFRS equity, and CET1 capital.

Outlook

Global economic growth prospects and monetary policy normalization continue to provide a supportive backdrop to our business, although ongoing geopolitical tensions, rising protectionism and trade disputes have further dampened investor sentiment and confidence. We expect these latter trends to continue to impact Global Wealth Management clients' transaction activity in the fourth quarter; however, moderately increased levels of volatility and volumes are generally positive for our institutional business in the Investment Bank.

Funding costs related to long-term debt and capital instruments issued to comply with regulatory funding and liquidity requirements will be higher than in the previous year, but should be broadly stable compared with the third quarter.

Our diversified business model helps us make continued progress towards achieving our strategic and financial targets.

Third quarter 2018 performance overview

UBS’s third quarter adjusted² PBT was CHF 1,733m, and reported PBT was CHF 1,668m. Adjusting² items included CHF 120m of restructuring expenses, partly offset by CHF 55 million gains on sale of real estate and subsidiaries. The adjusted² cost/income ratio was 76%, down 3 percentage points from the same quarter last year. Net profit attributable to shareholders was CHF 1,246m, with diluted earnings per share of CHF 0.32. Annualized adjusted² return on tangible equity excluding DTAs³ was 15.7%, an increase of 2.4 percentage points compared with the third quarter of 2017.

Global Wealth Management (GWM) adjusted² PBT CHF 1,003m, (4%) YoY

Recurring net fee income and net interest income both increased on a new high for invested assets, further progress on mandate penetration, as well as increased net interest margin on deposits and higher loan volumes, while transaction-based revenues declined on lower client activity in all regions. Mandate penetration increased to 33.9% of invested assets, a new high for both. Loans increased by 8%. Adjusted² operating expenses increased mainly due to investments in technology and regulatory-related expenses. The adjusted² cost/income ratio was 75%. Net new money was CHF 13.5bn for the quarter. Adjusted² net margin was 17bps.

Personal & Corporate Banking (P&C) adjusted² PBT CHF 422m, (3%) YoY

Strong business momentum and management actions offset interest rate pressure. Recurring net fee income increased by 6% YoY. Expenses increased on further investments in technology and higher regulatory-related expenses. The adjusted² cost/income ratio was 56%. Annualized net new business volume growth for Personal Banking remained strong at 4.5%.

Asset Management (AM) adjusted² PBT CHF 129m, (16%) YoY

Net management fees remained broadly unchanged when normalized for a business sale in October 2017, and despite continued pressure on margins. Performance fees were lower, reflecting declines in Hedge Fund Businesses and Equities. Adjusted² operating expenses decreased on lower personnel expenses, driven by management actions. The adjusted² cost/income ratio was 71%. Invested assets reached CHF 815bn, the highest in a decade, and net new money excluding money market flows was marginally positive.

Investment Bank (IB) adjusted² PBT CHF 507m, +44% YoY

ICS revenues increased by 19%, with growth in all regions and in all Equities and FRC product lines. Corporate Client Solutions revenues were CHF 644m, down 11% from a strong third quarter of 2017, with Advisory revenues up 42% on a lower global fee pool, more than offset by lower Equity Capital Markets revenues. Operating expenses decreased slightly. The adjusted² cost/income ratio improved to 74%. Adjusted² return on attributed equity was 21%.

Corporate Center adjusted² loss before tax was CHF 327m. Corporate Center – Services recorded an adjusted² loss before tax of CHF 177m. Group Asset and Liability Management adjusted² loss before tax was CHF 126m. Non-core and Legacy Portfolio posted an adjusted² loss before tax of CHF 25m.

Commitment to sustainable performance

UBS is committed to creating long-term positive value for its clients, employees, investors and society. This is illustrated by the ongoing recognition UBS receives for its activities and capabilities related to sustainable investing, philanthropy, environmental and human rights policies governing client and supplier relationships, the firm's environmental footprint and community investment.

Learn about UBS's priorities to drive change that matters at ubs.com/insociety.

Confirmed leader in sustainability

For the fourth year running, UBS was named the best performer in the Diversified Financial Services and Capital Markets Industry of the Dow Jones Sustainability Index, the most widely recognized corporate sustainability rating. Also, UBS's Environmental, Social and Governance (ESG) rating was raised to AA from A by investment-research firm MSCI ESG Research, another indicator of the firm's strong progress in the area of sustainability.

In the latest PRI ratings, Asset Management received the top score in the Strategy and Governance module, moving up from an A to an A+, outranking the peer median. The PRI sets a responsible investing benchmark for asset managers and asset owners within the industry and provides a year-on-year comparative analysis. Signatories report on their responsible investment activities for those asset classes in which more than 10% of their assets are invested.

Sustainable and impact investing

In August, UBS joined the Climate Bonds Initiative (CBI) Partners Program. UBS's partnership with the CBI will further develop its data capabilities and market-building efforts within green finance and sustainable fixed income and will add diversity and expertise to CBI’s Partners Network. CBI is an international organization working solely to mobilize the largest capital market of all, the USD 100trn bond market, for climate change solutions.

The UBS Global Gender Equality ETF launched earlier this year by Global Wealth Management and Asset Management has now surpassed the USD 100m milestone, reflecting the growing importance of sustainability goals such as gender equality for clients. The ETF invests in companies in the Solactive Equileap Global Gender Equality 100 Leaders Index, an equity index of 100 leading global companies with a strong record in gender diversity and sustainability. UBS channels 5% of the ETF’s management fees into philanthropic projects supporting this topic, via the UBS Optimus Foundation.

Information in this news release is presented for UBS Group AG on a consolidated basis unless otherwise specified. Financial information for UBS AG (consolidated) does not differ materially from UBS Group AG (consolidated) and a comparison between UBS Group AG (consolidated) and UBS AG (consolidated) is provided at the end of this news release.

¹ Net profit attributable to shareholders.

² Adjusted results are non-GAAP financial measures as defined by SEC regulations. Refer to the “Performance by business division and Corporate Center unit – reported and adjusted“ table in this news release.

³ Adjusted return on tangible equity excluding deferred tax expense/benefit and DTAs; calculated as adjusted net profit/loss attributable to shareholders excluding amortization and impairment of goodwill and intangible assets and deferred tax expense/benefit (annualized as applicable), divided by average tangible equity attributable to shareholders excluding any DTAs that do not qualify as CET1 capital.

Performance by business division and Corporate Center unit – reported and adjusted1,2
		For the quarter ended 30.9.18
CHF million		Global Wealth Management		Personal & Corporate Banking		Asset Manage- ment		Investment Bank		CC – Services3		CC – Group ALM		CC – Non- core and Legacy Portfolio		UBS
Operating income as reported		4,043		967		449		1,927		(39)		(107)		40		7,279
of which: gains on sale of real estate										30						30
of which: gains on sale of subsidiaries and businesses										25						25
Operating income (adjusted)		4,043		967		449		1,927		(94)		(107)		40		7,224
Operating expenses as reported		3,111		554		329		1,455		78		20		64		5,611
of which: personnel-related restructuring expenses4		11		1		2		1		43		0		0		58
of which: non-personnel-related restructuring expenses4		0		0		1		3		58		0		0		61
of which: restructuring expenses allocated from CC ­ Services4		60		8		6		31		(105)		1		(1)		0
Operating expenses (adjusted)		3,040		545		321		1,420		82		19		65		5,491
of which: net expenses for litigation, regulatory and similar matters5		28		0		0		(57)		30		0		3		3
Operating profit / (loss) before tax as reported		932		413		120		472		(118)		(127)		(24)		1,668
Operating profit / (loss) before tax (adjusted)		1,003		422		129		507		(177)		(126)		(25)		1,733
		For the quarter ended 30.9.17
CHF million		Global Wealth Management		Personal & Corporate Banking		Asset Manage- ment		Investment Bank		CC – Services3		CC – Group ALM		CC – Non- core and Legacy Portfolio		UBS
Operating income as reported		3,967		971		494		1,800		(70)		(49)		32		7,145
Operating income (adjusted)		3,967		971		494		1,800		(70)		(49)		32		7,145
Operating expenses as reported		3,065		559		366		1,531		331		18		54		5,924
of which: personnel-related restructuring expenses4		13		1		6		4		115		0		0		140
of which: non-personnel-related restructuring expenses4		22		0		5		6		111		0		0		145
of which: restructuring expenses allocated from CC ­ Services4		104		24		15		73		(218)		1		1		0
Operating expenses (adjusted)		2,926		534		340		1,448		322		17		53		5,639
of which: net expenses for litigation, regulatory and similar matters5		26		0		(5)		(46)		247		0		(25)		197
Operating profit / (loss) before tax as reported		902		411		127		269		(401)		(67)		(22)		1,221
Operating profit / (loss) before tax (adjusted)		1,041		436		153		352		(392)		(66)		(21)		1,506

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table may differ from those originally published in quarterly and annual reports due to 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. 3 Corporate Center ­ Services operating expenses presented in this table are after service allocations to business divisions and other Corporate Center units. 4 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives in 2018 for Global Wealth Management and Asset Management. 5 Reflects the net increase / (release) in provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of the UBS Group third quarter 2018 report for more information. Also includes recoveries from third parties (third quarter of 2018: CHF 0 million; third quarter of 2017: CHF 50 million).

Performance by business division and Corporate Center unit – reported and adjusted1,2
		Year-to-date 30.9.18
CHF million		Global Wealth Management		Personal & Corporate Banking		Asset Manage- ment		Investment Bank		CC – Services3		CC – Group ALM		CC – Non- core and Legacy Portfolio		UBS
Operating income as reported		12,395		2,847		1,348		6,405		(155)		(496)		187		22,531
of which: gains on sale of real estate										30						30
of which: gains on sale of subsidiaries and businesses										25						25
of which: net foreign currency translation losses4												(15)				(15)
Operating income (adjusted)		12,395		2,847		1,348		6,405		(210)		(480)		187		22,492
Operating expenses as reported		9,298		1,647		1,021		4,775		170		59		241		17,212
of which: personnel-related restructuring expenses5		17		3		18		14		133		0		0		186
of which: non-personnel-related restructuring expenses5		15		0		7		7		147		0		0		176
of which: restructuring expenses allocated from CC ­ Services5		145		25		20		94		(288)		2		1		0
of which: gain related to changes to the Swiss pension plan6		(61)		(35)		(10)		(5)		(114)						(225)
Operating expenses (adjusted)		9,183		1,654		985		4,664		292		57		240		17,074
of which: net expenses for litigation, regulatory and similar matters7		110		(1)		0		(57)		6		0		64		123
Operating profit / (loss) before tax as reported		3,097		1,200		327		1,630		(325)		(555)		(54)		5,320
Operating profit / (loss) before tax (adjusted)		3,213		1,193		363		1,741		(502)		(537)		(53)		5,417
		Year-to-date 30.9.17
CHF million		Global Wealth Management		Personal & Corporate Banking		Asset Manage- ment		Investment Bank		CC – Services3		CC – Group ALM		CC – Non- core and Legacy Portfolio		UBS
Operating income as reported		11,905		2,864		1,422		5,924		(107)		(79)		16		21,946
of which: gains on sale of financial assets at fair value through OCI8								107								107
of which: net foreign currency translation losses4												(22)				(22)
Operating income (adjusted)		11,905		2,864		1,422		5,817		(107)		(57)		16		21,861
Operating expenses as reported		9,184		1,678		1,082		4,724		652		29		183		17,534
of which: personnel-related restructuring expenses5		28		6		11		26		301		1		0		373
of which: non-personnel-related restructuring expenses5		49		0		16		12		337		0		0		413
of which: restructuring expenses allocated from CC ­ Services5		306		62		43		197		(615)		2		6		0
Operating expenses (adjusted)		8,801		1,611		1,012		4,488		629		26		177		16,747
of which: net expenses for litigation, regulatory and similar matters7		104		0		(4)		(45)		243		0		(58)		239
Operating profit / (loss) before tax as reported		2,721		1,185		340		1,200		(759)		(108)		(167)		4,412
Operating profit / (loss) before tax (adjusted)		3,104		1,252		410		1,329		(736)		(83)		(161)		5,114

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table may differ from those originally published in quarterly and annual reports due to 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. 3 Corporate Center ­ Services operating expenses presented in this table are after service allocations to business divisions and other Corporate Center units. 4 Related to the disposal of foreign subsidiaries and branches. 5 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives in 2018 for Global Wealth Management and Asset Management. 6 Refer to “Note 5 Personnel expenses” in the “Consolidated financial statements” section of the UBS Group third quarter 2018 report for more information. 7 Reflects the net increase / (release) in provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of the UBS Group third quarter 2018 report for more information. Also includes recoveries from third parties of CHF 27 million and CHF 51 million for the first nine months of 2018 and 2017, respectively. 8 Reflects a gain on sale of our remaining investment in IHS Markit in the Investment Bank. Figures presented for periods prior to 2018 relate to financial assets available for sale. With the adoption of IFRS 9 on 1 January 2018, certain financial assets were reclassified from available for sale under IAS 39 to measured at fair value through OCI under IFRS 9. Refer to “Note 1 Basis of accounting” and “Note 19 Transition to IFRS 9 as of 1 January 2018” in the “Consolidated financial statements” section of the UBS Group third quarter 2018 report for more information.

Our key figures
		As of or for the quarter ended								As of or year-to-date
CHF million, except where indicated		30.9.18		30.6.18		31.12.17		30.9.17		30.9.18		30.9.17
Group results
Operating income		7,279		7,554		7,122		7,145		22,531		21,946
Operating expenses		5,611		5,875		6,266		5,924		17,212		17,534
Operating profit / (loss) before tax		1,668		1,679		855		1,221		5,320		4,412
Net profit / (loss) attributable to shareholders		1,246		1,284		(2,336)		946		4,044		3,389
Diluted earnings per share (CHF)1		0.32		0.33		(0.63)		0.25		1.05		0.88
Key performance indicators2
Profitability and growth
Return on tangible equity (%)		11.3		11.6		(20.2)		8.3		12.2		9.8
Adjusted return on tangible equity excluding deferred tax expense / benefit and deferred tax assets (%)		15.7		16.7		8.6		13.3		16.7		15.5
Cost / income ratio (%)		77.0		77.5		86.9		83.0		76.2		79.8
Adjusted cost / income ratio (%)3		75.9		75.8		83.4		79.0		75.7		76.5
Net profit growth (%)		31.7		9.3				14.4		19.3		32.0
Resources
Common equity tier 1 capital ratio (%)4		13.5		13.4		13.8		13.7		13.5		13.7
Common equity tier 1 leverage ratio (%)4		3.80		3.75		3.69		3.69		3.80		3.69
Going concern leverage ratio (%)4		5.0		5.0		4.7		4.7		5.0		4.7
Additional information
Profitability
Return on equity (%)		9.8		10.1		(17.8)		7.2		10.6		8.5
Return on risk-weighted assets, gross (%)5		11.6		12.0		12.1		12.0		12.0		12.8
Return on leverage ratio denominator, gross (%)5		3.2		3.4		3.3		3.3		3.4		3.4
Resources
Total assets		932,471		944,482		915,642		913,599		932,471		913,599
Equity attributable to shareholders		51,122		50,774		51,214		53,493		51,122		53,493
Common equity tier 1 capital4		34,167		33,817		32,671		32,621		34,167		32,621
Risk-weighted assets4		252,247		252,373		237,494		237,963		252,247		237,963
Going concern capital ratio (%)4		17.9		17.8		17.6		17.4		17.9		17.4
Total loss-absorbing capacity ratio (%)4		31.8		32.3		33.0		32.9		31.8		32.9
Leverage ratio denominator4		898,000		902,408		886,116		884,834		898,000		884,834
Total loss-absorbing capacity leverage ratio (%)4		8.9		9.0		8.8		8.9		8.9		8.9
Liquidity coverage ratio (%)6		135		144		143		142		135		142
Other
Invested assets (CHF billion)7		3,267		3,242		3,179		3,054		3,267		3,054
Personnel (full-time equivalents)		65,556		63,684		61,253		60,796		65,556		60,796
Market capitalization8		59,754		59,072		69,125		63,757		59,754		63,757
Total book value per share (CHF)8		13.72		13.62		13.76		14.39		13.72		14.39
Tangible book value per share (CHF)8		12.02		11.90		12.04		12.67		12.02		12.67

1 Refer to “Note 8 Earnings per share (EPS) and shares outstanding” in the “Consolidated financial statements” section of the UBS Group third quarter 2018 report for more information. 2 Refer to the “Measurement of performance” section of our Annual Report 2017 for the definitions of our key performance indicators. 3 Calculated as adjusted operating expenses / adjusted operating income before credit loss (expense) or recovery. 4 Based on the Swiss systemically relevant bank framework as of 1 January 2020. Refer to the “Capital management” section of the UBS Group third quarter 2018 report for more information. 5 Calculated as operating income before credit loss (annualized as applicable) / average risk-weighted assets and average leverage ratio denominator, respectively. 6 Refer to the “Balance sheet, liquidity and funding management” section of the UBS Group third quarter 2018 report for more information. 7 Includes invested assets for Personal & Corporate Banking. 8 Refer to “UBS shares” in the “Capital management” section of the UBS Group third quarter 2018 report for more information.

Income statement
		For the quarter ended						% change from				Year-to-date
CHF million		30.9.18		30.6.18		30.9.17		2Q18		3Q17		30.9.18		30.9.17
Net interest income		1,670		985		1,743		70		(4)		4,399		4,855
Other net income from fair value changes on financial instruments		1,143		2,187		1,089		(48)		5		4,797		3,985
Credit loss (expense) / recovery		(9)		(28)		7		(67)				(63)		(39)
Fee and commission income		4,779		4,793		4,686		0		2		14,454		14,219
Fee and commission expense		(401)		(417)		(442)		(4)		(9)		(1,227)		(1,327)
Net fee and commission income		4,378		4,377		4,244		0		3		13,228		12,892
Other income		97		34		62		189		56		171		252
Total operating income		7,279		7,554		7,145		(4)		2		22,531		21,946
of which: net interest income and other net income from fair value changes on financial instruments		2,814		3,172		2,832		(11)		(1)		9,196		8,840
Personnel expenses		3,858		4,059		3,893		(5)		(1)		11,931		11,967
General and administrative expenses		1,433		1,516		1,760		(5)		(19)		4,374		4,754
Depreciation and impairment of property, equipment and software		304		284		256		7		19		860		761
Amortization and impairment of intangible assets		15		16		16		(6)		(4)		47		53
Total operating expenses		5,611		5,875		5,924		(4)		(5)		17,212		17,534
Operating profit / (loss) before tax		1,668		1,679		1,221		(1)		37		5,320		4,412
Tax expense / (benefit)		419		394		272		6		54		1,270		974
Net profit / (loss)		1,249		1,285		948		(3)		32		4,050		3,438
Net profit / (loss) attributable to non-controlling interests		3		1		2		131		67		6		49
Net profit / (loss) attributable to shareholders		1,246		1,284		946		(3)		32		4,044		3,389
Comprehensive income
Total comprehensive income		276		2,342		1,574		(88)		(82)		3,314		2,343
Total comprehensive income attributable to non-controlling interests		3		(1)		31				(90)		4		92
Total comprehensive income attributable to shareholders		273		2,343		1,543		(88)		(82)		3,311		2,251

Comparison UBS Group AG consolidated versus UBS AG consolidated
		As of or for the quarter ended 30.9.18						As of or for the quarter ended 30.6.18						As of or for the quarter ended 31.12.17
CHF million, except where indicated		UBS Group AG (consolidated)		UBS AG (consolidated)		Difference (absolute)		UBS Group AG (consolidated)		UBS AG (consolidated)		Difference (absolute)		UBS Group AG (consolidated)		UBS AG (consolidated)		Difference (absolute)
Income statement
Operating income		7,279		7,375		(96)		7,554		7,641		(88)		7,122		7,242		(120)
Operating expenses		5,611		5,843		(231)		5,875		6,089		(213)		6,266		6,487		(221)
Operating profit / (loss) before tax		1,668		1,532		136		1,679		1,553		126		855		755		100
of which: Global Wealth Management		932		923		9		1,037		1,027		9		782		778		4
of which: Personal & Corporate Banking		413		414		(1)		368		368		0		392		393		(1)
of which: Asset Management		120		120		0		101		101		0		238		238		0
of which: Investment Bank		472		462		11		569		549		20		49		50		(1)
of which: Corporate Center		(269)		(385)		116		(396)		(492)		96		(605)		(704)		99
of which: Services		(118)		(215)		97		(172)		(260)		88		(155)		(252)		97
of which: Group ALM		(127)		(146)		20		(206)		(214)		8		(214)		(217)		3
of which: Non-core and Legacy Portfolio		(24)		(24)		0		(18)		(18)		0		(236)		(236)		0
Net profit / (loss)		1,249		1,140		109		1,285		1,184		101		(2,310)		(2,385)		75
of which: net profit / (loss) attributable to shareholders		1,246		1,137		109		1,284		1,183		101		(2,336)		(2,412)		76
of which: net profit / (loss) attributable to preferred noteholders																26		(26)
of which: net profit / (loss) attributable to non-controlling interests		3		3		0		1		1		0		27		0		27
Statement of comprehensive income
Other comprehensive income		(973)		(963)		(10)		1,057		1,066		(8)		184		187		(3)
of which: attributable to shareholders		(973)		(963)		(10)		1,060		1,068		(8)		(124)		(122)		(2)
of which: attributable to preferred noteholders																307		(307)
of which: attributable to non-controlling interests		0		0		0		(2)		(2)		0		309		2		307
Total comprehensive income		276		177		99		2,342		2,250		92		(2,125)		(2,198)		73
of which: attributable to shareholders		273		174		99		2,343		2,251		92		(2,461)		(2,534)		73
of which: attributable to preferred noteholders																333		(333)
of which: attributable to non-controlling interests		3		3		0		(1)		(1)		0		336		3		333
Balance sheet
Total assets		932,471		933,091		(619)		944,482		945,296		(813)		915,642		916,363		(721)
Total liabilities		881,311		882,917		(1,606)		893,649		895,275		(1,626)		864,371		865,588		(1,217)
Total equity		51,160		50,174		986		50,834		50,021		813		51,271		50,775		496
of which: equity attributable to shareholders		51,122		50,136		986		50,774		49,961		813		51,214		50,718		496
of which: equity attributable to non-controlling interests		38		38		0		60		60		0		57		57		0
Capital information
Common equity tier 1 capital		34,167		34,392		(225)		33,817		33,686		132		32,671		33,240		(569)
Going concern capital		45,115		41,432		3,683		44,956		40,823		4,133		41,911		36,906		5,005
Risk-weighted assets		252,247		251,428		819		252,373		251,648		724		237,494		236,606		888
Common equity tier 1 capital ratio (%)		13.5		13.7		(0.1)		13.4		13.4		0.0		13.8		14.0		(0.2)
Going concern capital ratio (%)		17.9		16.5		1.4		17.8		16.2		1.6		17.6		15.6		2.0
Total loss-absorbing capacity ratio (%)		31.8		31.3		0.4		32.3		31.7		0.6		33.0		31.4		1.6
Leverage ratio denominator		898,000		898,894		(894)		902,408		903,467		(1,058)		886,116		887,189		(1,073)
Common equity tier 1 leverage ratio (%)		3.80		3.83		(0.02)		3.75		3.73		0.02		3.69		3.75		(0.06)
Going concern leverage ratio (%)		5.0		4.6		0.4		5.0		4.5		0.5		4.7		4.2		0.5
Total loss-absorbing capacity leverage ratio (%)		8.9		8.8		0.2		9.0		8.8		0.2		8.8		8.4		0.4

UBS’s third quarter 2018 report, news release and slide presentation will be available from 06:45 CEST on Thursday, 25 October 2018, at www.ubs.com/quarterlyreporting.

UBS will hold a presentation of its third quarter 2018 results on Thursday, 25 October 2018. The results will be presented by Sergio P. Ermotti, Group Chief Executive Officer, Kirt Gardner, Group Chief Financial Officer, Caroline Stewart, Global Head Investor Relations, and Hubertus Kuelps, Group Head Communications & Branding.

Introduction and results

• 09:00–9:45 CEST

• 08:00–8:45 BST

• 03:00–03:45 US EDT

Media Q&A session

• 11:45–12:15 CEST

• 10:45–11:15 BST

• 05:45–06:15 US EDT

Switzerland/Europe:		[phone]
UK:		[phone]
Americas:		[phone]
Other locations:		[phone]

Audio webcast

The presentation for analysts can be followed live on www.ubs.com/quarterlyreporting with a simultaneous slide show.

Webcast playback

An audio playback of the results presentation will be made available at www.ubs.com/investors later in the day.

UBS Group AG and UBS AG

Cautionary Statement Regarding Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBS’s business and future development. While these forward-looking statements represent UBS’s judgments and expectations 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. These factors include, but are not limited to: (i) the degree to which UBS is successful in the ongoing execution of its strategic plans, including its cost reduction and efficiency initiatives and its ability to manage its levels of risk-weighted assets (RWA), including to counteract regulatory-driven increases, leverage ratio denominator, liquidity coverage ratio and other financial resources, and the degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory and other conditions; (ii) continuing low or negative interest rate environment, 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, and currency exchange rates, and the effects of economic conditions, market developments, and geopolitical tensions on the financial position or creditworthiness of UBS’s clients and counterparties as well as on client sentiment and levels of activity; (iii) changes in the availability of capital and funding, including any changes in UBS’s credit spreads and ratings, as well as availability and cost of funding to meet requirements for debt eligible for total loss-absorbing capacity (TLAC); (iv) changes in or the implementation of financial legislation and regulation in Switzerland, the US, the UK 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, liquidity and funding 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; (v) the degree to which UBS is successful in implementing further changes to its legal structure to improve its resolvability and meet related regulatory requirements and the potential need to make further changes to the legal structure or booking model of UBS Group in response to legal and regulatory requirements, to proposals in Switzerland and other jurisdictions for mandatory structural reform of banks or systemically important institutions or to other external developments, and the extent to which such changes will have the intended effects; (vi) uncertainty as to the extent to which the Swiss Financial Market Supervisory Authority (FINMA) will confirm limited reductions of gone concern requirements due to measures to reduce resolvability risk; (vii) the uncertainty arising from the timing and nature of the UK exit from the EU and the potential need to make changes in UBS’s legal structure and operations as a result of it; (viii) changes in UBS’s competitive position, including whether differences in regulatory capital and other requirements among the major financial centers will adversely affect UBS’s ability to compete in certain lines of business; (ix) changes in the standards of conduct applicable to our businesses that may result from new regulation or new enforcement of existing standards, including recently enacted and proposed measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (x) 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 or 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; (xi) the effects on UBS’s cross-border banking business of tax or regulatory developments and of possible changes in UBS’s policies and practices relating to this business; (xii) 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 including differences in compensation practices; (xiii) 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, including from changes to US taxation under the Tax Cuts and Jobs Act; (xiv) 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; (xv) limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (xvi) the occurrence of operational failures, such as fraud, misconduct, unauthorized trading, financial crime, cyberattacks, and systems failures; (xvii) 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; (xviii) 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; and (xix) the effect that these or other factors or unanticipated events 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 SEC. More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBS’s Annual Report on Form 20-F for the year ended 31 December 2017. 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 news release may not add up precisely to the totals provided in the tables and text. Starting in 2018, percentages, percent changes, and adjusted results are calculated on the basis of unrounded figures. Information on absolute changes between reporting periods, which is provided in text and that can be derived from figures displayed in the tables, is calculated on a rounded basis. For prior periods, these values are calculated on the basis of rounded figures displayed in the tables and text.

Tables

Within tables, blank fields generally indicate that the field is not applicable or not 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. Percentage changes are presented as a mathematical calculation of the change between periods.

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