“In 2021, clients continued to put their trust in us and turned to us for our content, for our advice and for our solutions. We now manage USD 4.6 trillion in assets and during 2021, assets invested in sustainability-focus and impact strategies across the firm increased 78 %. We’re adapting our coverage models to deliver more digital and scalable advice as well as bespoke solutions. We’re expanding our core banking capabilities while continuing to focus on alternatives and sustainable investments. And we’re accelerating our technology investments whilemaintaining strong cost discipline. Our objective is to provide more choice on how clients can interact with our ecosystem and which of its capabilities they can make use of. Our recent acquisition of Wealthfront, a state-of-the-art, digital-only platform in the US tailored to the next generation of affluent investors, is but one example of how we are already taking steps to meet clients’ diverse and changing needs.
UBS is in better shape than ever. For the second year in a row, we achieved our targets, remained disciplined in our costs and saw strong contributions from all regions and divisions. This is just the start of what we’re capable of. To make the most of the momentum we’ve built, our updated targets focus on where we see the biggest opportunities.
Our new aspirations, targets and goals will position us to live up to our purpose, better serve clients, deploy technology in differentiated and impactful ways, and open our ecosystem for new and existing clients. RalphHamers, UBS’s Group CEO.
We are executing relentlessly for our clients
Our clients continued to put their trust in us, as was evident from the ongoing momentum in flows and volume growth throughout the year. Together with favorable market conditions and investor sentiment, this led to growth across the firm. During 2021, GWM saw USD 107 billion of net new fee-generating assets with inflows in all regions, and there was USD 28bn in net new lending across GWM and P&C Personal Banking, while strong client activity drove YoY increases of 7 % in transaction-based income in GWM and 33 % in Global Banking income.
We are driving growth while maintaining risk and cost discipline focusing on growth
Our global ecosystem delivers the power of investing to our clients, with UBS as the orchestrator of the value flow through contributors and clients. Our ecosystem has grown to USD 4.6trn of invested assets as we supported our clients, drove positive operating leverage and this resulted in another year of strong performance. Our clients’ needs are at the center of our strategy and we are focusing on serving them in more effective ways, underpinned by technology.
Our global ecosystem delivers the power of investing to our clients, with UBS as the orchestrator of the value flow through contributors and clients. Our ecosystem has grown to USD 4.6 trillion of invested assets as we supported our clients, drove positive operating leverage and this resulted in another year of strong performance. Our clients’ needs are at the center of our strategy and we are focusing on serving them in more effective ways, underpinned by technology.
Expanding into new client segments
We are expanding into new client segments, building new capabilities, broadening our footprint, and adding technology-enabled solutions to open new avenues of growth. We will leverage digital to expand our reach starting in the US, where we’ve announced our plans to acquire Wealthfront to deliver a digital wealth management offering to millennial and Gen Z affluent investors. Together, we can expand our wallet share, access new clients, lower the cost to serve, and drive long-term growth. Looking ahead, we are planning similar models in the rest of the world.
Accelerating strategic tech investments
We are accelerating our strategic tech investments, making technology a differentiator by levelling up technology. The aim is to maintain our tech expenses at ~10% of revenues while increasing IT strategic investments.
Maintaining risk and cost discipline
Across the firm, we will maintain our risk and cost discipline to support our growth plans. By streamlining our set-up, optimizing our footprint and exiting certain markets, simplifying and working in an agile way, we aim to deliver USD ~1bn gross in-year cost saves by 2023, which will fund our growth initiatives. We are on track to deliver these cost saves, with USD 0.2bn already achieved in 2021. We continue to have an elevated focus on risk management, with continual enhancement of day-to-day efforts.
We are committed to driving higher returns by unlocking the power of UBS
Full-year 2021 PBT was USD 9,484 million (up 16% YoY), including net credit loss releases of USD 148m, compared with net credit loss expenses of USD 694m in 2020. The cost/income ratio was 73.6%, an increase of 0.4 percentage points YoY. Operating income increased by 10% YoY, with operating expenses up by 8%, partly as a result of an increase in litigation provisions of USD 740m (EUR 650m) taken for the French cross-border matter. Excluding this litigation provision, operating expenses would have increased by 4% and PBT would have increased by 25%. Net profit attributable to shareholders was USD 7,457 million (up 14 % YoY), with diluted earnings per share of USD 2.06. Return on CET1 capital1 was 17.5%. The quarter-end CET1 capital ratio was 15.0% (guidance: ~13%) and the CET1 leverage ratio was 4.24% (guidance: >3.7%), both up YoY. We intend to propose a 2021 ordinary dividend of USD 0.50 per share2,3. We repurchased USD 2.6bn of shares in 2021, and we intend to repurchase up to USD 5bn of shares during 2022.
Targets and aspirations
We are aiming to create sustainable value through the cycle. Reflecting our improved operating performance over the last two years, we have updated our financial targets, while our capital guidance remains unchanged. In addition, we have outlined selected commercial and ESG aspirations, which support these targets.