We are executing our strategy to drive growth and efficiency
During 1Q22, we remained focused on executing our strategy. Sustainability remains an important topic for our clients and for us, and this quarter, we launched a new climate transition fund in collaboration with Aon. We saw USD 8bn commitments into private markets from our wealth management clients, who benefit from our scale to receive institutional-like access and pricing. We also continued to improve our mobile applications, helping our clients connect with us easily. In the quarter, more than half of our personal banking clients in Switzerland were active on mobile banking.
We are helping our clients navigate challenging markets
Macroeconomic, geopolitical and market factors created a high level of uncertainty in the first quarter, with Russia’s invasion of Ukraine, COVID-related restrictions and lockdowns, higher volatility, the lower economic growth outlook, and concerns about higher inflation and the monetary policy response. Our clients continued to put their trust in us to navigate this environment. This led to USD 19bn in net new fee-generating asset flows1 in GWM, USD 14bn net new money excluding money market flows in AM, and CHF 1bn net new investment products for Personal Banking.
We delivered strong firm-wide results while managing risk
1Q22 PBT was USD 2,729m (up 19% YoY), including net credit loss expenses of USD 18m. The cost/income ratio was 70.7 %, 3.1 percentage points lower YoY. Operating income increased by 8 % YoY, while operating expenses increased by 4%. Net profit attributable to shareholders was USD 2,136 million (up 17 % YoY), with diluted earnings per share of USD 0.61. Return on CET1 capital was 19.0 %. The quarter-end CET1 capital ratio was 14.3 % (guidance: ~13%) and the CET1 leverage ratio was 4.16 % (guidance: >3.7 %). We repurchased USD 1.7bn of shares in 1Q22, and we intend to repurchase a total of around USD 5 billion of shares during 2022.
1 Net new fee-generating assets exclude the effects on fee-generating assets of strategic decisions by UBS to exit markets or services.
Ralph Hamers, UBS’s Group CEO:
Extending UBS’s leadership in sustainable finance
Sustainable finance has been a firm-wide priority at UBS for years. Our aim is to continue to help private and institutional clients meet their investment objectives through sustainable finance, making it a critical component of our strategy. In addition, the firm wants to be the provider of choice for clients who wish to mobilize capital toward the achievement of the United Nations 17 Sustainable Development Goals.
In March, UBS received a strong rating in the S&P Global Ratings’ environmental, social, and governance (ESG) Evaluation, 11 points above the global average for all companies that S&P has evaluated as of 24 March 2022.
This reflects both UBS’s comprehensive efforts to integrate sustainability across the firm, its preparedness for thefuture, and its commitment to being transparent about its performance.
UBS shareholders back climate roadmapIn March, we published our strategic climate roadmap forachieving net-zero greenhouse gas emissions resulting fromall aspects of our business by 2050, with intermediatemilestones established to ensure progress. This includes the definition of suitable targets, as well as metrics and key performance indicators, to measure progress against these.
Our strategic climate roadmap was ratified by UBS shareholders in an advisory vote at the Annual General Meeting in April 2022.
Entering new partnerships for more impact
As part of our ongoing commitment to drive more sustainable practices, UBS has joined the Green Software Foundation as a steering member to explore ways to reduce the emissions associated with our large technology estate. One current project is the exploration of carbon-aware applications, which allow users to select computing options with the lowest emissions. Partnering with the Green Software Foundation to share these best practices and knowledge with other members is the next step in the journey toward net zero.
We are also working with a group of other financial institutions to develop Carbonplace, a voluntary carbon credit settlement platform that is expected to be fully operational by the end of 2022 and will enable reliable, secure, and scalable trading of certified carbon credits. Only carbon credits verified according to internationally recognized standards will be processed on this platform.
Finally, we have launched an innovative climate transition fund, co-developed with Aon. The fund’s strategy supports the evolving needs of clients to protect their assets from the effects of climate change and factors in social impacts to contribute to a just and fair climate transition, by tilting towards companies with revenues aligned to five selected UN Sustainable Development Goals.
As part of our continual effort to improve disclosure best practices, we also joined the Partnership for Carbon Accounting Financials (PCAF). Through partnerships like this, we aim to contribute to the development and implementation of a harmonized approach to assess and disclose greenhouse gas emissions associated with loans, capital market activities and investments. These standards should allow us to expand our Scope 3 disclosure in the future.
