Q2 2024 UBS Group AG Earnings Call

August 14, 2024

Ladies and gentlemen, good morning.

Unknown Executive: Ladies and gentlemen, good morning. Welcome to the UBS Second Quarter, 2024 results presentation.

Speaker Change: Welcome to the UBS second quarter 2024 results presentation.

Speaker Change: Come to the UBS second quarter 2024 results presentation. The conference must not be recorded for publication or broadcast.

Operator: The conference must not be recorded for publication or broadcast. You can register for questions at any time by pressing star and one on your telephone. Should you need operator assistance, please press star and zero.

Speaker Change: The conference must not be recorded for publication or broadcast.

Speaker Change: You can register for questions at any time by pressing star and 1 on your telephone.

Speaker Change: Can register for questions at any time by pressing star one on your telephone should you need operator assistance. Please press star zero at this time, it's my pleasure to hand over to Sarah Mccabe UBS Investor Relations. Please go ahead Madam.

Speaker Change: Should you need operator assistance, please press star and zero.

Speaker Change: At this time, it's my pleasure to hand over to Sarah Mackey, UBS Investor Relations.

Sarah Mackey: At this time, it's my pleasure to hand over to Sarah Mackey, UBS Investor Relations. Please go ahead, madam. Good morning and welcome everyone.

Speaker Change: Please go ahead, madam.

Sarah Mccabe: Good morning, and welcome everyone before we start I would like to draw your attention to our cautionary statement slide at the back of today's results presentation. Please also refer to the risk factors included in our annual report together with additional disclosures in our SEC filings.

Sarah Mccabe: Good morning and welcome everyone.

Unknown Executive: Before we start, I would like to draw your attention to our cautionary statement slide at the back of today's results presentation. Please also refer to the risk factors included in our annual reports, together with additional disclosures in our SEC filing. On slide two, you can see our agenda for today.

Speaker Change: On slide two you can see our agenda for today.

Sergio Ermotti: It's now my pleasure to hand over to Sergio Moti, Group CEO. Thank you, Sarah, and good morning, everyone. It has been a little over a year since the closing of the acquisition. We made the significant progress, and UBS continues to deliver on all of its commitments to stakeholders. Putting the needs of clients first during a challenging market environment has allowed us to maintain solid momentum while we fulfill our objectives of completing the integration by the end of 2026. As a consequence, they're not only we have dramatically reduced the execution risk of the integration. We are also well positioned to meet all of our financial targets and return to the level of profitability.

Sergio <unk>: Before we start, I would like to draw your attention to our cautionary statement slide at the back of today's results presentation.

Sergio <unk>: Now my pleasure to hand over to Sergio <unk> Group CEO.

Speaker Change: Yes.

Sergio <unk>: Thank you Sarah and good morning, everyone.

Speaker Change: Please also refer to the risk factors included in our annual report, together with additional disclosures in our SEC filings.

Speaker Change: On slide two you can see our agenda for today.

Speaker Change: It has been a little over a year since the closing of the acquisition we made the significant.

Speaker Change: Progress and UBS continues to deliver on all of its commitments to stakeholders.

Speaker Change: Putting the needs of clients first during a challenging market environment as allowed us to maintain solid momentum wide, we fulfill our objective of completing the integration by the end of 2026.

Speaker Change: As a consequence, not only we have dramatically reduced the execution risk of the integration. We are also well positioned to meet.

Speaker Change: Our financial targets and returned to the level of profitability UBS delivered before being asked to step in and stabilize credit Suisse.

Sergio Ermotti: UBS delivered before being asked to step in and stabilize Credit Swiss. I'm particularly proud to note that across the combined organization, our people are embracing the pillars, principles, and the avers that drives UBS's culture. To include clients' intrinsicity and collaboration, and enable us to successfully manage with and act with accountability and integrity.

I'm, particularly proud to note that across the combined organization. Our people are embracing the pillars principles <unk> that drives UBS is culture.

Speaker Change: These include clients Centricity and collaboration and enable us to successfully manage leads and act with accountability and integrity.

Sergio Ermotti: I like to thank all of my colleagues around the world for their dedication and hard work. Our second quarter result contributed to a strong first-off performance, reflecting the strength of our client franchises and discipline implementation of our strategy and integration plans. We ported net profit for the first-off, who was 2.9 billion, with underlying PBT of 4.7 billion and an underlying return on CT1 capital of 9.2%. We strengthened our capital position and maintained a balance sheet for all season with a CT1 capital ratio of 14.9% and total loss absorbing capacity of around 200 billion. Our parent bank is well capitalized even after withstanding the removal of significant regulatory concessions previously granted to Credit Swiss.

Speaker Change: I'd like to thank all of my colleagues around the world for their dedication and hard work.

Speaker Change: Our second quarter results contributed to a strong first half performance, reflecting the strength of our client franchises and disciplined implementation of our strategy and integration plans.

Speaker Change: Reported net profit for the first half was $2 9 billion with underlying PBT of $4 7 billion and an underlying return on <unk> capital of nine 2%.

Speaker Change: We strengthened our capital position and maintain a balance sheet for old season, with a CET one capital ratio of 14, 9% and total loss absorbing capacity of around $200 million.

Speaker Change: It's now my pleasure to hand over to Sergio Ermotti, Group CEO.

Speaker Change: Thank you, Sarah, and good morning, everyone.

Speaker Change: Our parent bank is well capitalized even after withstanding the removal of significant regulatory concessions previously granted to credit Suisse.

Unknown Executive: Ladies and gentlemen, good morning. Welcome to the UBS second quarter, 2024 results presentation.

Unknown Executive: The conference must not be recorded for publication or broadcast. You can register for questions at any time by pressing star and one on your telephone. Should you need operator assistance, please press star and zero.

Sergio Ermotti: As a result, we are executing on our 2024 capital return plans, and as I mentioned last quarter, we are committed to delivering on our mid-to-long-term ambitions for dividends and by banks. Turning to the integration, we have captured nearly half of our targeted gross cost saving as we restructure our core businesses and wind down non-core and legacy, where we have materially reduced risk weighted assets over the last 12 months. As part of our de-resking efforts, we have also made good progress addressing credit switches legacy legal issues, including the supply chain finance funds and months of big matters.

Speaker Change: As a result, we are executing on our 2020 for capital return plans and as I mentioned last quarter, we are committed to delivering on our mid to long term ambitions for dividends and buybacks.

Sarah Mackey: At this time, it's my pleasure to hand over to Sarah Mackey, UBS investor relations. Please go ahead, Madam.

Speaker Change: Turning to the integration we have captured nearly half of our targeted gross cost savings as we restructure our core businesses and wind down non core and legacy where we have materially reduced risk weighted assets over the last 12 months.

Speaker Change: It has been a little over a year since the closing of the acquisition, we made significant progress and UBS continues to deliver on all of its commitments to stakeholders.

Speaker Change: Putting the needs of clients first during a challenging market environment has allowed us to maintain solid momentum while we fulfill our objective of completing the integration by the end of 2020.

Sarah Mackey: Good morning and welcome everyone. Before we start, I would like to draw your attention to our cautionary statement slide at the back of today's results presentation. Please also refer to the risk factors included in our annual reports, together with additional disclosures in our SEC filing.

Speaker Change: I'm particularly proud to note that across the combined organization, our people are embracing the pillars, principles and behaviors that drives UBS's culture, to include client centricity and collaboration and enable us to successfully manage with and act with accountability and integrity.

Speaker Change: I'd like to thank all of my colleagues around the world for their dedication and hard work.

Speaker Change: As part of our Derisking efforts. We have also made good progress addressing credit suisse's legacy legal issues, including the supply chain finance funds and Monza <unk> matters.

Unknown Executive: On slide two, you can see our agenda for today.

Sergio Ermotti: It's now my pleasure to hand over to Sergio Moti Group CEO. Thank you Sarah and good morning everyone. It has been a little over a year since the closing of the acquisition. We made the significant progress and UBS continues to deliver on all of its commitments to stakeholders. Putting the needs of clients first during a challenging market environment has allowed us to maintain solid momentum while we fulfill our objectives of completing the integration by the end of 2026.

Speaker Change: Okay.

Sergio Ermotti: Following these intense months of execution during which we obtain more than one under and 80 approvals from roughly 80 regulators in more than 40 jurisdictions. We completed the mergers of our parent and Swiss banks and transition to a single US intermediate holding company. This clears the way for the next set of critical milestones that will support the realization of further integration synergies. But let me reiterate something you have heard me say before. We still have a lot of work ahead of us to address Credit Switch's structural lack of sustainable profitability. While we are encouraged by the significant progress we have made across the group, the path to restoring profitability to the pre-acquisition levels won't be linear.

Following this intense months of execution during which we obtained more than one under an 80 approvals from roughly 80 regulators in more than 40 jurisdictions.

Speaker Change: We completed the merger of our parent and Swiss banks and transition.

Speaker Change: A single U S intermediate holding company.

Speaker Change: This clears the way for the next set of critical milestones that will support the realization of further integration synergies.

Sergio Ermotti: As a consequence, they're not only we have dramatically reduced the execution risk of the integration. We are also well positioned to meet all of our financial targets and return to the level of profitability. UBS delivered before being asked to step in and stabilize credit Swiss. I'm particularly proud to note that across the combined organization, our people are embracing the pillars, principles and the avers that drives UBS's culture. To include clients' intrinsicity and collaboration and enable us to successfully manage with and act with accountability and integrity.

Speaker Change: But let me reiterate some things you have heard me say before.

Speaker Change: We still have a lot of work's head of us to address credit suisse's structural lack of sustainable profitability.

Speaker Change: While we are encouraged by the significant progress we have made across the group the path to restoring profitability to the pre acquisition levels won't be linear.

Sergio Ermotti: We are now entering the next phase of our integration, which will be key to realizing the further substantial cost capital funding and tax benefits necessary to deliver on our 2026 financial targets. We are following through on our plans, admit heightened uncertainties in the markets. These are the moments in which UBS proves its strengths, resilience, and superior ability to serve and advise clients. This is reflected in the trust that our clients have placed in us every quarter since the close, with a total of 127 billion in net nuances. We have also remained focused on our strategic objectives to enhance our client offering and leverage the breadth, scale, and synergy of our combined franchises.

Speaker Change: We are now entering the next phase of our integration, which will be key to realizing the further substantial cost capital funding and tax benefits necessary to deliver on our 2026 financial targets.

Sergio Ermotti: I like to thank all of my colleagues around the world for their dedication and hard work. Our second quarter result contributed to a strong first-off performance reflecting the strength of our client franchises and discipline implementation of our strategy and integration plans. We ported net profit for the first-off who was 2.9 billion with underlying PBT of 4.7 billion and an underlying return on CT1 capital of 9.2%. We strengthened our capital position and maintained a balance sheet for all season with a CT1 capital ratio of 14.9% and total loss absorbing capacity of around 200 billion.

Speaker Change: We are following through on our plants have meet heightened uncertainties in the markets.

UBS: These are the moments in which UBS proves the strength resilience and superior ability to serve and advise clients.

UBS: This is reflected in the trust that our clients have placed in us every quarter since the close with a total of 127 billion in net new assets.

UBS: We have also remained focused on our strategic objectives to enhance our client offering and leverage the breadth scale and synergies of our combined franchises.

Sergio Ermotti: In the investment bank, I am pleased by the client response to the strategic additions we have made to reinforce our capabilities and competitive positions. The first half performance is a positive signal that the investments are paying off. In global markets, we saw the highest second quarter on record, and in global banking, we have captured sizable market share gains. Importantly, we have achieved these results without compromising on our risk and capital discipline. We are also increasing collaboration across the firm as GWM clients continue to benefit from our IB products and capabilities. This drove the majority of wealth management expansion of client activities here, particularly in the Americas and APEC.

UBS: In the investment Bank I'm pleased by the client response to the strategic additions, we have made to reinforce our capabilities and competitive position.

Sergio Ermotti: Our parent bank is well capitalized even after withstanding the removal of significant regulatory concessions previously granted to credit Swiss. As a result, we are executing on our 2024 capital return plans and as I mentioned last quarter, we are committed to delivering on our mid-to-long-term ambitions for dividends and by banks. Turning to the integration, we have captured nearly half of our targeted gross cost saving as we restructure our core businesses and wind down non-core and legacy, where we have materially reduced risk weighted assets over the last 12 months.

UBS: The first half performance is a positive signal that the investments are paying off.

UBS: Our second quarter results contributed to a strong first half performance reflecting the strength of our client franchises and disciplined implementation of our strategy and integration plan. Reported net profit for the first half was $2.9 billion, with underlying PBT of $4.7 billion and an underlying return on CT1 capital of 9.2%.

UBS: In global markets, we saw the highest second quarter on record.

UBS: And global banking, we have captured sizeable market share gains.

UBS: We strengthened our capital position and maintained a balance sheet for all seasons with a CT1 capital ratio of 14.9% and total loss absorbing capacity of around 200%.

UBS: Importantly, we've achieved these results without compromising on our risk and capital discipline.

UBS: Our parent bank is well capitalized, even after withstanding the removal of significant regulatory concessions previously granted to Credit Suisse. As a result, we are executing on our 2024 capital return plans.

UBS: And as I mentioned last quarter, we are committed to delivering on our mid to long term ambitions for dividends and buyback.

UBS: We are also increasing collaboration across the firm as gws clients continue to benefit from our IV products and capabilities.

UBS: Turning to the integration, we have captured nearly half of our targeted gross cost savings as we restructure our core businesses and wind down non-core and legacy, where we have materially reduced risk-weighted assets over the last 12, As part of our de-risking efforts, we have also made good progress addressing Credit Suisse's legacy legal issues, including the Supply Chain Finance Fund and Monza Big Matter.

UBS: While we are encouraged by the significant progress we have made across the group, the path to restoring profitability to the pre-acquisition levels won't be linear.

UBS: Following these intense months of execution, during which we obtained more than 180 approvals from roughly 80 regulators in more than 40 jurisdictions, We completed the mergers of our parent and Swiss banks and transition, to a single U.S. intermediate holding company.

UBS: We are now entering the next phase of our integration, which will be key to realizing the further substantial cost, capital, funding and tax benefits necessary to deliver on our 2026 financial target.

UBS: This clears the way for the next set of critical milestones that will support the realization of further integration, But let me reiterate something you have heard me say before.

UBS: We still have a lot of work ahead of us to address Credit Suisse's structural lack of sustainable profitability.

UBS: We are following through on our plans amid heightened uncertainties in the market.

This drove the majority of our wealth management expansion of client activity this year, particularly in the Americas and APAC.

UBS: These are the moments in which UBS proves its strength, resilience and superior ability to serve and advise clients.

UBS: This is reflected in the trust that our clients have placed in us every quarter since the close, with a total of $127 billion in net new assets.

UBS: We have also remained focused on our strategic objectives to enhance our client offering and leverage the breadth, scale and synergies of our combined franchises.

UBS: In the Investment Bank, I am pleased by the client's response to the strategic additions we have made to reinforce our capabilities and competitive position. First half performance is a positive signal that the investments are paying off.

Sergio Ermotti: Another example is our newly created Unified Global Alternate. Units, which combines our alternatives investment capabilities across GWM and Asset Management. In fact, this is not just an internal cooperation; we are reshaping the competitive landscape by effectively creating a top five global player and limited partner with 250 billion in invested assets across hedge funds, private equity, private credit, infrastructure, and real estate. Unified global alternatives will offer our institutional wholesale, wealth management clients a more comprehensive offering and enhanced access to exclusive coin investment opportunities. It will also provide general partners with a single point of access to the full distribution power of our firm.

Another example is our newly created unified global alternatives unit, which combines our alternatives investment capabilities across GW AUM and asset management.

Sergio Ermotti: As part of our de-resking efforts, we have also made good progress addressing credit switches legacy legal issues, including the supply chain finance funds and months of big matters. Following these intense months of execution during which we obtain more than one under and 80 approvals from roughly 80 regulators in more than 40 jurisdictions. We completed the mergers of our parent and Swiss banks and transition to a single US intermediate holding company. This clears the way for the next set of critical milestones that will support the realization of further integration synergies.

UBS: In fact, it is not just an internal cooperation we are reshaping the competitive landscape by effectively creating a top five global player and limited partner with $250 billion in invested assets across hedge funds private equity private credit infrastructure and real.

UBS: It states.

UBS: Unified global alternatives will offer our institutional wholesale.

UBS: Wealth management clients, a more comprehensive offering any minced access to exclusive co investment opportunities.

UBS: We'll also provide general partners with a single point of access to the full distribution power of our firm.

Sergio Ermotti: But let me reiterate something you have heard me say before. We still have a lot of work ahead of us to address credit switches structural lack of sustainable profitability. While we are encouraged by the significant progress we have made across the group, the path to restoring profitability to the pre acquisition levels won't be linear. We are now entering the next phase of our integration, which will be key to realizing the further substantial cost capital funding and tax benefits necessary to deliver on our 2026 financial targets.

UBS: Yeah.

Sergio Ermotti: In asset management, we are offsetting margin compression by increasing operational efficiency, which is one of the key focus areas for the business. In Switzerland, we continue to enjoy the thrust of our clients despite a very competitive and, at times, less than constructive environment. With around 30 billion Swiss francs in many new deposits in the last 13 months and approximately 350 billion of loans expanded to clients, we continue to maintain our role as an important engine of credit. Since the acquisition, we granted all renewed around 85 billion Swiss francs of loans. Higher interest rates, the cost of increased regulatory, capital and liquidity requirements, a changing macroeconomic outlook and, last but not least, the necessity to reprise some loans granted by Credit Suisse at unacceptable risk returns are adding an impact on pricing of new credit.

Speaker Change: In asset management, we are offset the margin compression by increasing operational efficiency, which is one of the key focus areas for the business.

Speaker Change: In Switzerland, we continued to enjoy the trust of our clients, despite a very competitive and at times less than constructive environment.

Speaker Change: With around 30 billion Swiss francs in menu deposit in the last 13 months and approximately 350 billions of loans expanded to clients. We continue to maintain our role as an important engine of credits.

Sergio Ermotti: We are following through on our plans admit heightened uncertainties in the markets. These are the moments in which UBS proves its strengths, resilience and superior ability to serve and advise clients. This is reflected in the trust that our clients have placed in us every quarter since the close with a total of 127 billion in net nuances. We have also remained focused on our strategic objectives to enhance our client offering and leverage the breadth, scale and synergy of our combined franchises.

Speaker Change: Since the acquisition, we granted all renewed around 85 billion Swiss francs of loans.

Speaker Change: Higher interest rates the cost of increased regulatory capital and liquidity requirements are changing macroeconomic outlook and last but not least the necessity to reprise some loans granted by credit Suisse.

Speaker Change: Unacceptable risk returns are adding an impact on pricing of new credit.

Sergio Ermotti: Of course, those are not always easy discussions to have with clients, but we are constructively engaging with them, and I believe the vast majority understand the rationale. Switzerland is a key pillar of our strategy, and we are fully committed to maintaining our leadership. Switzerland and the economy benefit from UBS's on parallel, competitive global reach and capabilities. In turn, our business is a unique differentiator when serving clients around the world.

Speaker Change: Of course, those are not always easy discussions to have with clients, but we are constructively engaging with them and I believe the vast majority understand the rationale.

Speaker Change: Switzerland is a key pillar of our strategy and we are fully committed to maintaining our leadership swisscom.

Speaker Change: Swiss clients and the economy benefits from UBS is unparalleled competitive global reach and capabilities.

In turn our sweeteners is a unique differentiator when serving clients around the world.

Sergio Ermotti: A testament of these symbiosis, as a testament of these symbiosis, we were recognized by EuroMoney as Switzerland's best bank for the 10th time since 2012. And the word best bank. As we continue our integration journey in the Swiss business, we believe it will be important to further communicate with all our stakeholders about our approach and strategy.

Sergio Ermotti: We are also increasing collaboration across the firm as GWM clients continue to benefit from our IB products and capabilities. This drove the majority of wealth management expansion of client activities here, particularly in the Americas and APEC. Another example is our newly created Unified Global Alternate. Units, which combines our alternatives investment capabilities across GWM and asset management. In fact, this is not just an internal cooperation, we are reshaping the competitive landscape by effectively creating a top five global player and limited partner with 250 billion in invested assets across hedge funds, private equity, private credit infrastructure and real estate.

Speaker Change: Assessment of <unk> <unk>.

Speaker Change: <unk>.

Speaker Change: As a testament of the symbiosis, we were recognized by Euromoney as Switzerland Best Bank for the third time since 2012, and the award Best Bank.

Sabina Keller: As we continue our integration journey the Swiss business, we believe it will be important to further communicate with all our stakeholders about our approach and strategy to that end in September power head of Switzerland, Sabina color boosted will present at our flagship best of Switzerland Conference.

Sergio Ermotti: Unified global alternatives will offer our institutional wholesale, wealth management clients a more comprehensive offering and enhanced access to exclusive coin investment opportunities. It will also provide general partners with a single point of access to the full distribution power of our firm. In asset management, we are offsetting margin compression by increasing operational efficiency, which is one of the key focus areas for the business. In Switzerland, we continue to enjoy the thrust of our clients despite a very competitive and at times less than constructive environment.

Sergio Ermotti: To that end, in September, our head of Switzerland, Sabine Keller-Buse, will present at our flagship Best of Switzerland conference, which brings together investors and corporate clients. Looking ahead and more broadly, ongoing geopolitical tensions and anticipation ahead of U.S. Elections will likely result in heightened market volatility compared to the first half of the year. In this environment, we have two key priorities. First, we must continue to help clients manage the challenges and opportunities that arise. Second, we must stay focused and not allow short-term market dynamics to distract us from achieving our ultimate goal, which is to continue to execute on the integration and invest strategically to position UBS for long-term value creation.

Sabina Keller: Which brings together investors and corporate clients.

Sabina Keller: Looking ahead and more broadly ongoing geopolitical tensions and anticipation ahead of U S elections will likely result in heightened market volatility compared to the first half of the year.

Sabina Keller: This environment, we have two key priorities first we must continue to help clients manage the challenges and opportunities that arise.

Sabina Keller: Second we must stay focused and not allow short term market dynamics to distract us from achieving our ultimate goal, which is to continue to execute on the integration and invest strategically to position UBS for the long term value creation.

Sergio Ermotti: The mentoring appointments we announced in the second quarter will enable us to continue to progress on this journey. At the same time, we can put even more emphasis on our priorities and prospects for sustainable growth, particularly in the Americas and Asia Pacific. We are confident this will also help us to deliver better outcomes for our clients and the communities where we live and work.

Sabina Keller: The management appointments, we announced in the second quarter will enable us to continue to progress on this journey at the same time, we can put even more emphasis on our priorities and prospects for sustainable growth, particularly in the Americas and Asia Pacific.

Sergio Ermotti: With around 30 billion Swiss francs in many new deposits in the last 13 months and approximately 350 billions of loans expanded to clients, we continue to maintain our role as an important engine of credit. Since the acquisition, we granted all renewed around 85 billion Swiss francs of loans. Higher interest rates, the cost of increased regulatory, capital and liquidity requirements, a changing macroeconomic outlook and last but not least, the necessity to reprise some loans granted by Credit Suisse at unacceptable risk returns are adding an impact on pricing of new credit.

We are confident this will also help us to deliver better outcomes for our clients and the communities, where we live and work with.

Todd Tuckner: With that, I hand over to Todd. Thank you, Sergio, and good morning, everyone. In the second quarter, we delivered strong underlying profitability, and we made further progress in reducing costs and optimizing our balance sheet. Net profit in the quarter was 1.1 billion. Our EPS was 34 cents and our underlying return on CET1 capital was 8.4%. Throughout my remarks today, I referred to underlying performance in US dollars and made comparisons to our performance in the first quarter, unless stated otherwise. From the third quarter onwards, we'll revert to making year-on-year comparisons. As by then, the prior year period will fully capture combined performance post-the-Credit-Swiss acquisition.

Speaker Change: With that I hand.

Todd: Over to Todd.

Todd: Yeah.

Todd: Thank you Sergio and good morning, everyone.

Todd: In global markets, we saw the highest second quarter on record.

Todd: In the second quarter, we delivered strong underlying profitability and we made further progress in reducing costs and optimizing our balance sheet.

Todd: Net profit in the quarter was $1 1 billion, our EPS was <unk> 34.

Todd: And our underlying return on CET, one capital was eight 4%.

Todd: Throughout my remarks today I refer to underlying performance in U S dollars and make comparisons to our performance in the first quarter unless stated otherwise.

Sergio Ermotti: Of course, those are not always easy discussions to have with clients, but we are constructively engaging with them and I believe the vast majority understand the rationale. Switzerland is a key pillar of our strategy and we are fully committed to maintaining our leadership. Switzerland and the economy benefit from UBSs on parallel, competitive global reach and capabilities. In turn, our business is a unique differentiator when serving clients around the world.

Todd: From the third quarter onwards, we will revert to making year on year comparisons as by than the prior year period, we will fully capture combined performance post the credit Suisse acquisition.

Todd Tuckner: Turning to slide six. Total revenues for the quarter reached 11.1 billion, with top-line performance in our core businesses holding up nicely from a strong first quarter, down 2 percent sequentially. Net interesting come headwinds were partially offset by higher recurring fee income in our wealth and Swiss businesses and by improving activity in IB capital markets. Revenues in our non-core and legacy business were positive in the quarter, albeit 0.6 billion lower versus an exceptional first quarter. On a reported basis, revenues reached 11.9 billion and included 0.8 billion of mainly purchase price allocation adjustments in our core businesses, with an additional 0.6 billion expected in the third quarter.

Todd: Turning to slide six.

Todd: And in global banking, we have captured sizable market share gains.

Todd: Total revenues for the quarter reached $11 1 billion with topline performance in our core business is holding up nicely from a strong first quarter down 2% sequentially.

Todd: Importantly, we have achieved these results without compromising on our risk and capital development.

Todd: We are also increasing collaboration across the firm as GWM clients continue to benefit from our IB products and capabilities.

Todd: This drove the majority of wealth management expansion of client activities this year, particularly in the Americas and APEC.

Todd: Another example is our newly created Unified Global Alternative.

Todd: Unit, which combines our alternative investment capabilities across GWM and asset management.

Todd: In fact, this is not just an internal cooperation. We are reshaping the competitive landscape by effectively creating a top five global player and limited partner with 250 billion in invested assets across hedge funds, private equity, private credit, infrastructure, and real estate.

Todd: Unified Global Alternatives will offer our institutional wholesale, Wealth Management Clients A More Comprehensive Offering and Enhanced Access to Exclusive Co-Investment Opportunities, It will also provide general partners with a single point of access to the full distribution power of our firm.

Todd: In Asset Management, we are offsetting margin compression by increasing operational efficiency, which is one of the key focus areas for the business.

Sergio Ermotti: A testament of these symbiosis, as a testament of these symbiosis, we were recognized by EuroMoney as Switzerland best bank for the 10th time since 2012. And the word best bank. As we continue our integration journey in the Swiss business, we believe it will be important to further communicate with all our stakeholders about our approach and strategy.

Todd: Net interest income headwinds were partially offset by higher recurring fee income in our wealth and Swiss businesses and by improving activity in capital markets.

Todd: Revenues in our noncore and legacy business were positive in the quarter, albeit 0.6 billion lower versus an exceptional first quarter.

Todd: On a reported basis revenues reached 11 9 billion and included zero point $8 billion of mainly purchase price allocation adjustments in our core businesses with an additional 0.6 billion expected in the third quarter.

Sergio Ermotti: To that end, in September, our head of Switzerland Sabine Keller-Buse will present at our flagship best of Switzerland conference, which brings together investors and corporate clients. Looking ahead and more broadly, ongoing geopolitical tensions and anticipation ahead of U.S, elections will likely result in heightened market volatility compared to the first half of the year. In this environment, we have two key priorities. First, we must continue to help clients manage the challenges and opportunities that arise.

Todd Tuckner: Underlying operating expenses in the quarter were 9 billion, decreasing by 3 percent. Excluding litigation and variable and financial advisor compensation tied to production, expenses were also down 3 percent as we further progressed our cost-cutting and workforce management initiatives, despite the intense integration agenda. At the end of the second quarter, there were about 3,500 fewer total staff compared to the end of the first quarter and 23,000, or 15 percent, fewer since the end of 2022. Integration-related expenses in the quarter were $1.4 billion, resulting in reported operating expenses of $10.3 billion. Credit-loss expense was $95 million, driven by a small number of positions in our Swiss corporate loan book.

Todd: Underlying operating expenses in the quarter were 9 billion decreasing by 3% exclude.

Todd: Excluding litigation and variable in financial adviser compensation tied to production expenses were also down 3% as we further progressed, our cost cutting and workforce management initiatives. Despite the intense integration agenda.

Sergio Ermotti: Second, we must stay focused and not allow short-term market dynamics to distract us from achieving our ultimate goal, which is to continue to execute on the integration and invest strategically to position UBS for long-term value creation.

Todd: At the end of the second quarter. There were about 3500 fewer total staff compared to the end of the first quarter and 23000 or 15% fewer since the end of 2022.

Todd: Integration related expenses in the quarter were $1 4 billion, resulting in reported operating expenses of $10 3 billion.

Sergio Ermotti: The mentoring appointments we announced in the second quarter will enable us to continue to progress on this journey.

Todd: Credit loss expense was $95 million driven by a small number of positions in our Swiss corporate loan book.

Sergio Ermotti: At the same time, we can put even more emphasis on our priorities and prospects for sustainable growth, particularly in the Americas and Asia Pacific. We are confident this will also help us to deliver better outcomes for our clients and the communities where we leave and work.

Okay.

Todd Tuckner: Our tax expense in the quarter was $293 million, representing an effective rate of 20%, helped by NCL's performance and the initial positive effects of completed legal entity mergers. In the second half of 2024, excluding the effects of any DTA revaluation, we expect the effective tax rate to be around 35%, mainly as expected pre-tax losses in legacy Credit Swiss entities can't be fully offset against profits elsewhere in the group. The tax rate could benefit if NCL continues to perform better than expected. We continue to expect the ongoing optimization of our legal entity structure to gradually support a return to a normalized tax rate of around 23% by 2026.

Todd: Our tax expense in the quarter was 293 million, representing an effective rate of 20% helped by Ngls performance and the initial positive effects of completed legal entity mergers.

Todd: In the second half of 2024, excluding the effects of any DTA revaluation, we expect the effective tax rate to be around 35% mainly.

Unknown Executive: With that, I hand over to Todd.

Todd Tuckner: Thank you, Sergio and good morning, everyone. In the second quarter, we delivered strong underlying profitability and we made further progress in reducing costs and optimizing our balance sheet. Net profit in the quarter was 1.1 billion. Our EPS was 34 cents and our underlying return on CET1 capital was 8.4%. Throughout my remarks today, I referred to underlying performance in US dollars and made comparisons to our performance in the first quarter unless stated otherwise. From the third quarter onwards, we'll revert to making year-on-year comparisons. As by then, the prior year period will fully capture combined performance post-the-credit-Swiss acquisition.

Mainly as expected pretax losses in legacy credit Suisse entities.

Todd: <unk> be fully offset against profits elsewhere in the group.

Todd: The tax rate could benefit if NCL continues to perform better than expected.

Todd: We continue to expect the ongoing optimization of our legal entity structure to gradually support a return to a normalized tax rate of around 23% by 2026.

Todd Tuckner: Turning to our quarterly cost update on slide 7, exiting the second quarter, we achieve an additional 900 million in gross cost saves when compared to three months earlier, bringing the cumulative total since the end of 2022 to $6 billion, or around 45% of our total gross cost save ambition. We estimate that around half of this quarter saves benefit our underlying op-ex, with the other half reinvested as planned in our technology estate, as well as the offset increases in variable and financial advisor compensation tied to production. To date, we've generated around 4 billion of net saves, primarily driven by NCL, which has shed around 3.5 billion of its 2022 cost baseline.

Todd: Turning to our quarterly cost update on slide seven.

Todd: With a round start.

Todd: Swiss francs in many new deposits in the last 13 months and approximately 350 billions of loans extended to clients we continue to maintain our role as an important engine of credit, Since the acquisition, we granted or renewed around 85 billion Swiss francs of loans.

Todd: Higher interest rates, the cost of increased regulatory capital and liquidity requirements, a changing macroeconomic outlook, and last but not least, the necessity to reprice some loans granted by Credit Suisse at unacceptable risk returns are having an impact on pricing of new credit.

Todd: Of course, those are not always easy discussions to have with clients, but we are constructively engaging with them, and I believe the vast majority understand the rationale.

Todd: Exiting the second quarter, we achieved an additional $900 million in gross cost saves when compared to three months earlier, bringing the cumulative total since the end of 2022 to 6 billion or around 45% of our total gross cost saving ambition.

Todd: Switzerland is a key pillar of our strategy and we are fully committed to maintaining our leadership.

Todd: Swiss clients and the economy benefit from UBS's unparalleled competitive global reach and capability.

Todd: In turn, our sweetness is a unique differentiator when serving clients around the world.

Todd: Participants of this symbiosis, As a testament of this symbiosis, we were recognized by Euromoney as Switzerland's best bank for the 10th time since 2012 and the world's best bank.

Todd: As we continue our integration journey in the Swiss business, we believe it will be important to further communicate with all our stakeholders about our approach and strategy. To that end, in September, Tower Head of Switzerland Sabine Keller-Busse will present at our flagship Best of Switzerland conference, which brings together investors and corporate clients.

Todd: Looking ahead, and more broadly, ongoing geopolitical tensions and anticipation ahead of U.S. elections will likely result in heightened market volatility compared to the first half of the year.

Todd Tuckner: Turning to slide six. Total revenues for the quarter reached 11.1 billion with top-line performance in our core businesses holding up nicely from a strong first quarter, down 2 percent sequentially. Net interesting come headwinds were partially offset by higher recurring fee income in our wealth and Swiss businesses and by improving activity in IB capital markets. Revenues in our non-core and legacy business were positive in the quarter, albeit 0.6 billion lower versus an exceptional first quarter.

Todd: We estimate that around half of this quarter's saves benefit our underlying opex with the other half reinvested as planned and our technology is state as well as to offset increases in variable and financial adviser compensation tied to production.

Todd: To date, we've generated around $4 billion of net saves primarily driven by NCL, which has shed around $3 5 billion of its 2022 cost baseline.

Todd Tuckner: On a reported basis, revenues reached 11.9 billion and included 0.8 billion of mainly purchase price allocation adjustments in our core businesses with an additional 0.6 billion expected in the third quarter. Underlying operating expenses in the quarter were 9 billion, decreasing by 3 percent. Excluding litigation and variable and financial advisor compensation tied to production, expenses were also down 3 percent as we further progressed our cost-cutting and workforce management initiatives despite the intense integration agenda.

Todd Tuckner: Following the legal entity mergers, we now turn our focus to the critical client account and platform migration work planned for our core businesses. We start in the fourth quarter with GWM's booking hubs in Hong Kong, Singapore, and Luxembourg, followed thereafter by client account transitions in our Swiss booking center, which supports both GWM and PNC. Along with our ongoing cost rundown efforts in non-core and legacy, these initiatives represent the most material drivers of future cost savings, as we decommission technology systems, hardware, and data centers, while also unlocking further staff capacity. As I highlighted last quarter, the pace of saves is expected to moderately decelerate from the quarterly run rates observed over the last several quarters, while we prepare for and initially undertake these significant integration activities.

Todd: Following the legal entity mergers, we now turn our focus to the critical client account and platform migration work plan for our core businesses, we start in the fourth quarter with gws booking hubs in Hong Kong, Singapore, and Luxembourg, followed thereafter by client account transitions in our <unk>.

Todd: In this environment, we have two key priorities.

Todd: First, we must continue to help clients manage the challenges and opportunities that arise.

Todd: Second, we must stay focused and not allow short-term market dynamics to distract us from achieving our ultimate goal, which is to continue to execute on the integration and invest strategically to position UBS for long-term value creation.

Todd: The mentoring appointments we announced in the second quarter will enable us to continue to progress on this journey.

Todd: At the same time, we can put even more emphasis on our priorities and prospects for sustainable growth, particularly in the Americas and Asia Pacific.

Todd: We are confident this will also help us to deliver better outcomes for our clients and the communities where we live and work.

Todd: With that, I hand over to Todd.

Todd: Thank you, Sergio.

Todd: <unk> booking center, which supports both gws and P&C.

Todd: Along with our ongoing cost run down efforts and noncore and legacy these initiatives represent the most material drivers of future cost savings as we decommission technology systems hardware and data centers, while also unlocking further staff capacity.

Todd Tuckner: At the end of the second quarter, there were about 3500 fewer total staff compared to the end of the first quarter and 23,000 or 15 percent fewer since the end of 2022. Integration-related expenses in the quarter were $1.4 billion, resulting in reported operating expenses of $10.3 billion. Credit-loss expense was $95 million, driven by a small number of positions in our Swiss corporate loan book. Our tax expense in the quarter was $293 million, representing an effective rate of 20%, helped by NCL's performance, and the initial positive effects of completed legal entity mergers.

Todd: Yes.

Todd: As I highlighted last quarter the pace of sales is expected to moderately decelerate from the quarterly run rates observed over the last several quarters, while we prepare for and initially undertake these significant integration activities.

Todd Tuckner: We expect to pick up the pace as we implement these transitions throughout 2025 and into 2026, particularly benefiting the cost-income ratios of GWM and PNC. The rate at which we are incurring integration-related expenses, which front-run, underlying op-ex saves, is also indicative of the headway we're making on costs. In the second half, we expect to book 2.3 billion of integration-related expenses, of which 1.1 billion in the third quarter. By the end of this year, we expect to have incurred around 70% of total cost to achieve our 2026 exit rate efficiency targets.

Todd: We expect to pick up the pace as we implement these transitions throughout 2025 and into 2026, particularly benefiting the cost income ratios of Gws and P&C.

Todd: The rate at which we are incurring integration related expenses, which front run underlying opex saves is also indicative of the headway we are making on costs.

Todd: In the second half, we expect to book $2 3 billion of integration related expenses of which $1 1 billion in the third quarter.

Todd Tuckner: In the second half of 2024, excluding the effects of any DTA revaluation, we expect the effective tax rate to be around 35%, mainly as expected pre-tax losses in legacy credit Swiss entities can't be fully offset against profits elsewhere in the group. The tax rate could benefit if NCL continues to perform better than expected. We continue to expect the ongoing optimization of our legal entity structure to gradually support a return to a normalized tax rate of around 23% by 2026.

Todd: By the end of this year, we expect to have incurred around 70% of total cost to achieve our 2026 exit rate efficiency targets.

Todd: Yeah.

Todd: Okay.

Todd Tuckner: Moving to our balance sheet. In the second quarter, we reduced risk-weighted assets by a further 15 billion, of which 8 billion from the active rundown of positions in our non-core and legacy portfolio, which I will come back to shortly. Over 8 billion of the decline was seen across the core business divisions, mainly resulting from the financial resource optimization work in GWM and PNC. As I highlighted earlier in the year, this work is addressing sub-hurdle returns on capital deployed, including by reducing deposit and loan volumes. The upshot is additional capacity to absorb headwinds from regulatory and risk methodology changes, model harmonization between the two banks, and the implementation of Basel III final, now confirmed for January 2025.

Todd: Moving to our balance sheet.

Todd: And good morning, everyone.

Todd: In the second quarter, we delivered strong underlying profitability, and we made further progress in reducing costs, and Optimizing Our Balance Sheet. Net profit in the quarter was $1.1 billion, our EPS was $0.34, and our underlying return on CET1 capital is 8.4%.

Todd: In the second quarter, we reduced risk weighted assets by a further 15 billion of which 8 billion from the active rundown of positions in our noncore and legacy portfolio, which I will come back to shortly.

Todd: Throughout my remarks today, I refer to underlying performance in U.S. dollars and make comparisons to our performance in the first quarter, unless stated otherwise.

Todd: From the third quarter onwards, we'll revert to making year-on-year comparisons, as by then. Prior Year Period will fully capture combined performance post Credit Suisse acquisition.

Todd: Over $8 billion of the decline was seen across the core business divisions, mainly resulting from the financial resource optimization work in Gws and P&C.

Todd: As I highlighted earlier in the year.

Todd: This work is addressing sub hurdle returns on capital deployed including by reducing deposit and loan volumes.

Todd: The upshot is additional capacity to absorb headwinds from regulatory and risk methodology changes.

Todd: Model harmonization between the two banks and the implementation of Basel III final.

Todd: Now confirms for January 2025.

Todd Tuckner: While we continue active dialogue with our supervisor on various aspects of the final rules, at present we continue to expect the day 1 impact of Basel III final to be around 5% of our WA, driven mainly by FR-TV. We'll update our estimates by no later than the fourth quarter, as requirements firms. Our leverage ratio denominator decreased by 35 billion in the quarter. This reduction was driven by several factors, including full repayment of the central bank Ella facility granted to Credit Swiss. Lower lending volumes, mainly from our financial resource optimization efforts, and the active rundown of our NCL portfolio.

Todd: While we continue active dialogue with our supervisor on various aspects of the final rules at present, we continue to expect the day, one impact of Basel III final to be around 5% of <unk> driven mainly by Fr T B.

Todd Tuckner: To date, we've generated around 4 billion of net saves, primarily driven by NCL, which has shed around 3.5 billion of its 2022 cost baseline. Following the legal entity mergers, we now turn our focus to the critical client account and platform migration work planned for our core businesses. We start in the fourth quarter with GWM's booking hubs in Hong Kong, Singapore, and Luxembourg, followed thereafter by client account transitions in our Swiss booking center, which supports both GWM and PNC.

Todd: We'll update our estimates by no later than the fourth quarter as requirements firms.

Our leverage ratio denominator decreased by 35 billion in the quarter.

Todd: This reduction was driven by several factors, including full repayment of the Central Bank Ela facility granted to credit Suisse.

Todd: Lower lending volumes, mainly from our financial resource optimization efforts and the active rundown of our NCL portfolio.

Todd Tuckner: We ended the second quarter with an LCR of 212%, reflecting the Ella repayment, and T-LAC of 198 billion.

Todd: We ended the second quarter with an LCR of 212%, reflecting the ela repayment.

Todd Tuckner: Along with our ongoing cost rundown efforts in non-core and legacy, these initiatives represent the most material drivers of future cost savings, as we decommission technology systems, hardware, and data centers, while also unlocking further staff capacity. As I highlighted last quarter, the pace of saves is expected to moderately decelerate from the quarterly run rates observed over the last several quarters, while we prepare for and initially undertake these significant integration activities. We expect to pick up the pace as we implement these transitions throughout 2025 and into 2026, particularly benefiting the cost income ratios of GWM and PNC.

Todd: And T lack of 198 billion.

Todd Tuckner: Turning to slide 9, our CET-1 capital ratio as of Quarter N was 14.9%. The numerator reflects the rules of this year's expected dividend, and a reserve for 2024 sharey purchases, of which we have executed 467 million of the plan 1 billion as of last Friday. Additionally, our CET-1 capital includes all relevant portions of the purchase price allocation adjustments made to Credit Suisse's equity as of the acquisition paid last June. With the 12-month measurement period now concluded, total PPA adjustments against the purchased equity of Credit Suisse amounted to negative 26.5 billion, of which about 70% reduced CET-1 capital.

Todd: Turning to slide nine our CET, one capital ratio as of quarter end was 14, 9%.

Todd: Turning to slide six.

Todd: Total revenues for the quarter reached $11.1 billion, with top-line performance in our core businesses holding up nicely from a strong first quarter, down 2% sequentially. Net interest income headwinds were partially offset by higher recurring fee income in our wealth and Swiss businesses and by improving activity in IB capital markets.

Todd: The numerator reflects accruals this year as expected dividend and a reserve for 2024 share repurchases of which we have executed $467 million of the planned 1 billion as of last Friday.

Todd Tuckner: The rate at which we are incurring integration-related expenses, which front-run, underlying op-ex saves, is also indicative of the headway we're making on costs. In the second half, we expect to book 2.3 billion of integration-related expenses, of which 1.1 billion in the third quarter. By the end of this year, we expect to have incurred around 70% of total cost to achieve our 2026 exit rate efficiency targets.

Todd: Revenues in our non-core and legacy business were positive in the quarter, albeit $0.6 billion lower versus an exceptional first quarter. On a reported basis, revenues reached $11.9 billion and included $0.8 billion of mainly purchase price allocation adjustments in our core business, with an additional $0.6 billion expected in the third quarter.

Todd: Underlying operating expenses in the quarter were $9 billion, decreasing by 3%. Excluding Litigation and Variable and Financial Advisor Compensation Tied to Production, Expenses were also down 3% as we further progressed our cost-cutting and workforce management initiatives despite the intense integration agenda.

Todd: At the end of the second quarter, there were about 3,500 fewer total staff, and Mike Lichter Bang, Secretary of the Star Security Agency.

Todd: Additionally, our CET one capital includes all relevant portions of the purchase price allocation adjustments made to credit suisse's equity as of the acquisition date last June.

Todd: With the 12 month measurement period now concluded total PPA adjustments against the purchased equity of credit Suisse amounted to negative $26 5 billion of which about 70% reduce CET one capital.

Todd Tuckner: Following completion of the parent bank merger earlier in the quarter, next week will report UBS AG's consolidated and standalone capital ratios and other information for the first time on a combined basis. Basis, UBS AG's standalone CET-1 capital ratio at quarter end is expected at 13.5% on a fully applied basis. To put this capital ratio in perspective, it's important to compare the way we manage our parent bank capital versus Credit Suisse's pre-acquisition practices. We provide for the complete transition of the risk-weight rule changes applicable to UBS AG's subsidiary investments, which overall are valued prudently. Moreover, we don't depend on any affiliate valuation concession from the regulator.

Todd: Following completion of the parent bank merger earlier in the quarter next week, we will report UBS AG is consolidated and stand alone capital ratios and other information for the first time on a combined basis.

Todd: UBS AG Standalone CET, one capital ratio at quarter end is expected at 13, 5% on a fully applied basis.

Todd Tuckner: Moving to our balance sheet. In the second quarter, we reduced risk-weighted assets by a further 15 billion, of which 8 billion from the active rundown of positions in our non-core and legacy portfolio, which I will come back to shortly. Over 8 billion of the decline was seen across the core business divisions, mainly resulting from the financial resource optimization work in GWM and PNC. As I highlighted earlier in the year, this work is addressing sub-hurtle returns on capital deployed, including by reducing deposit and loan volumes.

Todd: To put this capital ratio perspective, it's important to compare the way, we manage our parent bank capital versus credit Suisse's pre acquisition practices.

Todd: We provide for the complete transition of the risk weight rule changes applicable to UBS AG subsidiary investments, which overall our value prudently.

Todd: Moreover, we don't depend on any affiliate valuation concession from the regulator.

Todd Tuckner: This was not the case with Credit Suisse before the takeover, where its approach overstated the parent bank's resilience and ultimately limited restructuring optionality. In this context, our merged parent bank already provides for around 20 billion of additional capital resulting from the acquisition, including the progressive add-ons from growth in balance sheet and market share that will be phased in over five years starting in 2026. The result is a parent bank capital buffer of around 100 basis points above the current fully applied requirement by 2030.

Speaker Change: This was not the case with credit Suisse before the takeover, where its approach overstated the para banks resilience.

Todd Tuckner: The upshot is additional capacity to absorb headwinds from regulatory and risk methodology changes, model harmonization between the two banks, and the implementation of Basel III final, now confirmed for January 2025. While we continue active dialogue with our supervisor on various aspects of the final rules, at present we continue to expect the day 1 impact of Basel III final to be around 5% of our WA, driven mainly by FR-TV. We'll update our estimates by no later than the fourth quarter, as requirements firms.

Speaker Change: And ultimately limited restructuring optionality.

Speaker Change: In this context, our merge parent bank already provides for around 20 billion of additional capital, resulting from the acquisition, including the progressive add ons from growth in balance sheet and market share that will be phased in over five years. Starting in 2026. The result is a parent bank capital buffer.

Speaker Change: <unk> of around 100 basis points above the current fully applied requirement by 2030.

Todd Tuckner: Our leverage ratio denominator decreased by 35 billion in the quarter. This reduction was driven by several factors, including full repayment of the central bank Ella facility granted to credit Swiss. Lower lending volumes, mainly from our financial resource optimization efforts, and the active rundown of our NCL portfolio. We ended the second quarter with an LCR of 212% reflecting the Ella repayment, and T-LAC of 198 billion.

Speaker Change: Yeah.

Todd Tuckner: Moving to our business divisions and starting with Global Wealth Management on slide 10. GWM's pre-tax profit was 1.2 billion on revenues of 5.8 billion, which were up 3% year over year on an estimated combined basis. Against the complex economic backdrop, clients sought our differentiated advice and solutions, as evidenced by continued strong momentum in net new asset inflows and transactional activity. Overall, we generated 27 billion of net new assets, a growth rate of 2.7% with positive inflows across all regions. I'm particularly pleased with this result, considering the variety of headwinds to net new asset growth that the business successfully navigated in the quarter, including around 6 billion in seasonal tax outflows in the US.

Speaker Change: Moving to our business divisions, and starting with global wealth management on slide 10.

Speaker Change: Look what we found.

Speaker Change: Integration-related expenses in the quarter were $1.4 billion, resulting in reported operating expenses of $10.3 billion.

Speaker Change: Credit loss expense was $95 million, driven by a small number of positions in our Swiss Corporate Loan Book.

Speaker Change: Our tax expense in the quarter was $293 million, representing an effective rate of 20%, helped by NCL's performance and the initial positive effects of completed legal entity mergers, in the second half of 2024.

Speaker Change: Excluding the effects of any DTA revaluation, we expect the effective tax rate to be around 35%, mainly as expected pre-tax losses in legacy Credit Suisse entities, can't be fully offset against profits elsewhere in the group. The tax rate could benefit if NCL continues to perform better than expected.

Speaker Change: We continue to expect the ongoing optimization of our legal entity structure to gradually support a return to a normalized tax rate of around 23% by 2026.

Speaker Change: Gws pre tax profit was $1 2 billion on revenues of $5 8 billion, which were up 3% year over year on an estimated combined basis.

Speaker Change: Against the complex economic backdrop client sought our differentiated advice and solutions as evidenced by continued strong momentum in net new asset inflows and transactional activity.

Speaker Change: Overall, we generated 27 billion of net new assets a growth rate of two 7% with positive inflows across all regions.

Todd Tuckner: Turning to slide 9, our CET-1 capital ratio as of quarter N was 14.9%. The numerator reflects the rules of this year's expected dividend, and a reserve for 2024 sharey purchases of which we have executed 467 million of the plan 1 billion as of last Friday. Additionally, our CET-1 capital includes all relevant portions of the purchase price allocation adjustments made to credit Swiss's equity as of the acquisition paid last June. With the 12-month measurement period now concluded, total PPA adjustments against the purchased equity of credit Swiss amounted to negative 26.5 billion, of which about 70% reduced CET-1 capital.

Speaker Change: I'm, particularly pleased with this result, considering the variety of headwinds to net new asset growth that the business successfully navigated in the quarter, including around $6 billion in seasonal tax outflows in the U S.

Todd Tuckner: Let me unpack this further. To date, we've retained the vast majority of Credit Suisse's invested assets, notwithstanding that more than 40% of Credit Suisse's wealth advisors have left since October 2022. I would also note that these relationship managers advised on only 20% of assets, meaning that, overall, we've retained the more productive Credit Suisse advisors, a testament to the appeal of our platform. We've also kept around 80% of the first large wave of maturing fixed-term deposits from last year's Windback campaign, with the peak in maturities expected in the third quarter. Furthermore, we made strong progress this quarter in our efforts to increase profitability on sub-hurdle relationships.

Speaker Change: Let me unpack this further to.

Speaker Change: To date, we've retained the vast majority of credit suisse's invested assets notwithstanding that more than 40% of credit Suisse's wealth advisors have left since October 2022.

Speaker Change: I would also note that these relationship managers advise that only 20% of assets, meaning that overall, we've retained the more productive credit Suisse advisors.

Speaker Change: Test them into the appeal of our platform.

Speaker Change: We've also kept around 80% of the first large wave of maturing fixed term deposits from last year's win back campaign with the peak in maturity is expected in the third quarter.

Speaker Change: Furthermore, we made strong progress this quarter and our efforts to increase profitability on sub hurdle relationships.

Todd Tuckner: Higher returns come from both driving increased platform revenue and proactively exiting subpar loans, with these actions in the quarter boosting the revenue over RWA margin by around 30 basis points sequentially. Lastly, from a macro standpoint, the equity capital markets and, in particular, IPOX... Identity, ordinarily a significant driver of wealth creation and net new asset generation, have only recently started to recover. These dynamics underscore the basis of our short-term annual guidance of 100 billion for 2024 and 2025, and equally the resilience of our net new asset achievement in the quarter, as well as the high level of client conviction in our advice and solutions.

Speaker Change: Higher returns come from both driving increased platform revenue and proactively exiting sub par loans with these actions in the quarter boosting the revenue over <unk> margin by around 30 basis points sequentially.

Speaker Change: Lastly from a macro standpoint, the equity capital markets and in particular IPO activity ordinarily a significant driver of wealth creation and net new asset generation have only recently started to recover.

Todd Tuckner: We provide for the complete transition of the risk-weight rule changes applicable to UBS AG's subsidiary investments, which overall are valued prudently. Moreover, we don't depend on any affiliate valuation concession from the regulator. This was not the case with credit Swiss before the takeover, where its approach overstated the parent bank's resilience and ultimately limited restructuring optionality. In this context, our merged parent bank already provides for around 20 billion of additional capital resulting from the acquisition, including the progressive add-ons from growth in balance sheet and market share that will be phased in over five years starting in 2026. The result is a parent bank capital buffer of around 100 basis points above the current fully applied requirement by 2030.

Speaker Change: These dynamics underscore the basis of our short term annual guidance of 100 billion for 2024, and 2025 and equally the resilience of our net new asset achievement in the quarter as well as the high level of client conviction and our advice and solutions.

Speaker Change: Now onto details of Gws financial performance.

Todd Tuckner: Revenues decline 2% sequentially as lower NII and the expected sequential drop in transactional activity were partially offset by growth and recurring net fee income, supported by higher average levels of fee-generating assets. Net interest income decreased by 2% sequentially to 1.6 billion, driven by ongoing deposit mixed shifts and declining loan volumes, partially offset by our repricing actions, which has mentioned support. This report higher returns on capital and net interest margin. Looking towards your end, we maintain our previous guidance that full year 2024 NII will be roughly flat versus 4Q23 annualized. This includes a low-to-mid single-digit percentage sequential drop in the third quarter, driven by a decrease in volumes, mixed shifts in anticipation of falling rates, and the impact on our replication portfolios.

Speaker Change: Revenues declined 2% sequentially as lower NII in the expected sequential drop in transactional activity were partially offset by growth in recurring net fee income supported by higher average levels of fee generating assets.

Speaker Change: Net interest income decreased by 2% sequentially to $1 6 billion driven by ongoing deposit mix shifts and declining loan volumes, partially offset by a repricing actions, which as mentioned support higher returns on capital and net interest margin.

Todd Tuckner: Moving to our business divisions and starting with global wealth management on slide 10. GWM's pre-tax profit was 1.2 billion on revenues of 5.8 billion, which were up 3% year over year on an estimated combined basis. Against the complex economic backdrop, clients sought our differentiated advice and solutions as evidenced by continued strong momentum in net new asset inflows and transactional activity. Overall, we generated 27 billion of net new assets, a growth rate of 2.7% with positive inflows across all regions.

Speaker Change: Looking towards year end.

Speaker Change: We maintain our previous guidance that full year 2020 for NII will be roughly flat versus <unk> 23 annualized.

Speaker Change: This includes a low to mid single digit percentage sequential drop in the third quarter drew.

Speaker Change: Driven by a decrease in volumes.

Speaker Change: Mix shifts in anticipation of falling rates and the impact on our replication portfolios.

Todd Tuckner: In arriving at this outlook and in light of recent rates volatility, we're modeling 100 basis points of US dollar policy rate reductions by the end of 2024. The outlook for net interest income in our US wealth business is expected to be influenced by competitive dynamics affecting the pricing of sweep deposits. By the middle of 4Q24, we intend to adjust the sweep deposit rates in our US advisory accounts, which, net of offsetting factors, are expected to reduce pre-tax profits by around 50 million annually. Looking across our wealth business beyond your end, we expect an inflection point in GWM net interest income around the time implied forwards reach a structural floor and stabilize.

Speaker Change: In arriving at this outlook and in light of recent rates volatility were modeling 100 basis points of U S. Dollar policy rate reductions by the end of 2024.

Todd Tuckner: I'm particularly pleased with this result, considering the variety of headwinds to net new asset growth that the business successfully navigated in the quarter, including around 6 billion in seasonal tax outflows in the US. Let me unpack this further. To date, we've retained the vast majority of credit Swiss's invested assets, notwithstanding that more than 40% of credit Swiss's wealth advisors have left since October 2022. I would also note that these relationship managers advised on only 20% of assets, meaning that, overall, we've retained the more productive credit Swiss advisors a testament to the appeal of our platform.

Speaker Change: The outlook for net interest income in our U S wealth business is expected to be influenced by competitive dynamics affecting the pricing of sweep deposits.

Speaker Change: By the middle of <unk> 'twenty, four we intend to adjust the sweep deposit rates in our U S advisory accounts, which net of offsetting factors are expected to reduce pretax profits by around $50 million annually.

Speaker Change: Okay.

Speaker Change: Looking across our wealth business beyond year end, we expect an inflection point in gws net interest income around the time implied forwards reach a structural floor and stabilize and clients begin to re leverage driving loan balances and NII higher.

Todd Tuckner: We've also kept around 80% of the first large wave of maturing fixed-term deposits from last year's Windback campaign, with the peak in maturities expected in the third quarter. Furthermore, we made strong progress this quarter in our efforts to increase profitability on sub hurdle relationships. Higher returns come from both driving increased platform revenue and proactively exiting subpar loans, with these actions in the quarter boosting the revenue over RWA margin by around 30 basis points sequentially.

Todd Tuckner: And clients begin to releverage, driving loan balances and NII higher. Moreover, it's essential to consider that GWM's diversified and CIO-driven fee-generating business model has proven both its appeal to clients and ability to drive profitable growth, even during past periods of low or negative interest rates. Consequently, in addition to increased lending, it's reasonable to expect that lower interest rates will spur increased transactional activity, mandate sales, and investments in alternatives across our wealth business. Recurring net fee income increased by 3% to 3.1 billion from higher client balances, net sales, and our UBS managed account offerings showed continued momentum, contributing to a sequentially higher recurring net fee margin in the quarter.

Speaker Change: Moreover, it is essential to consider that gws diversified and CIO driven fee generating business model has proven both its appeal to clients and ability to drive profitable growth.

Speaker Change: Even during past periods of low or negative interest rates. Consequently in addition to increased lending it's reasonable to expect that lower interest rates will spur increased transactional activity mandate sales and investments and alternatives across our wealth business.

Todd Tuckner: Lastly, from a macro standpoint, the equity capital markets and, in particular, IPOX... Identity, ordinarily a significant driver of wealth creation and net new asset generation have only recently started to recover. These dynamics underscore the basis of our short-term annual guidance of 100 billion for 2024 and 2025, and equally the resilience of our net new asset achievement in the quarter, as well as the high level of client conviction in our advice and solutions.

Speaker Change: Recurring net fee income increased by 3% to $3 1 billion from higher client balances net sales in our UBS managed account offerings showed continued momentum contributing to a sequentially higher recurring net fee margin in the quarter.

Todd Tuckner: Transaction-based revenues decreased quarter on quarter to 1.1 billion, but notably increased around 14% year-on-year on an estimated combined basis. With APAC up around 30%, and the Americas up over 20%, and broadly flat sequentially versus a strong first quarter. Network, both regions performed exceptionally well in structured products as clients sought customized investment opportunities in an environment of low volatility, high interest rates, and continued global tech appeal. I would also highlight that our investments in combining GWM and IB markets and solutions capabilities in the Americas are paying off, as evidenced by our transactional revenue performance over the first half of the year, up around 20% versus the same period in 2023.

Speaker Change: Transaction based revenues decreased quarter on quarter to $1 1 billion, but notably increased around 14% year on year on an estimated combined basis with APAC up around 30% and the Americas up over 20% and broadly flat sequentially versus a strong first quarter.

Speaker Change: Both regions performed exceptionally well in structured products as clients sought customized investment opportunities in an environment of low volatility high interest rates and continued global appeal.

Speaker Change: I would also highlight that our investments in combining G Wm and IB markets and solutions capabilities in the Americas are paying off as evidenced by our transactional revenue performance over the first half of the year up around 20% versus the same period in 2023.

Todd Tuckner: Expenses were roughly flat quarter on quarter, excluding compensation-related effects; underlying operating expenses dropped 2% sequentially. As highlighted earlier, the upcoming client account migration work is expected to be a significant driver of cost reductions in GWM throughout 2025 and into 2026.

Speaker Change: Expenses were roughly flat quarter on quarter, excluding compensation related effects underlying operating expenses dropped 2% sequentially as highlighted earlier the upcoming client account migration work is expected to be a significant driver of cost reductions in gws throughout 2025 and enter 2020.

Todd Tuckner: This includes a low-to-mid single-digit percentage sequential drop in the third quarter, driven by a decrease in volumes, mixed shifts in anticipation of falling rates, and the impact on our replication portfolios. In arriving at this outlook and in light of recent rates volatility, we're modeling 100 basis points of US dollar policy rate reductions by the end of 2024. The outlook for net interest income in our US wealth business is expected to be influenced by competitive dynamics affecting the pricing of sweep deposits.

Speaker Change: Six.

Todd Tuckner: Turning to personal and corporate banking on slide 11, PNC delivered a second quarter pre-tax profit of 645 million Swiss francs. Revenues were down 4% sequentially, driven by an 8% decline in net interest income that was partly offset with increases in recurring net fees and transaction-based revenues. PNC's NII in the quarter was primarily affected by higher liquidity costs and the SMB's 25 basis point interest rate cut from March, as we kept our Swiss clients' deposit pricing unchanged. In the third quarter, we expect NII to tick down sequentially by a low single-digit percentage, mainly due to the effects of the SMB's second 25 basis point rate cut from late June.

Speaker Change: Turning to our quarterly cost update on slide 7. Exiting the second quarter, we achieved an additional $900 million in gross cost saves when compared to three months earlier, bringing the cumulative total since the end of 2022 to $6 billion or around 45% of our total gross cost save ambition. We estimate that around half of this quarter's saves benefit our underlying OPEC, with the other half reinvested as planned in our technology estate, as well as to offset increases in variable and financial advisor compensation tied to production.

Speaker Change: Turning to personal and corporate banking on slide 11.

Speaker Change: To date, we've generated around $4 billion of net savings. Primarily driven by NCL, which has shed around $3.5 billion of its 2022 cost baseline.

Speaker Change: Following the legal entity mergers, we now turn our focus to the critical client account and platform migration work planned for our core business. We start in the fourth quarter with GWM's booking hubs in Hong Kong, Singapore and Luxembourg, followed thereafter by client account transitions in our Swiss booking center, which supports both GWM and PNC, along with our ongoing cost rundown efforts and non-Corinne legacy.

Speaker Change: These initiatives represent the most material drivers of future cost savings as we decommission technology systems, hardware, and data centers, while also unlocking further staff capacity.

Speaker Change: P&C delivered a second quarter pre tax profit of 645 million Swiss francs.

Speaker Change: As I highlighted last quarter, the pace of saves is expected to moderately decelerate from the quarterly run rates observed over the last several quarters, while we prepare for and initially undertake these significant integration activities. We expect to pick up the pace as we implement these transitions throughout 2025 and into 2026. The rate at which we are incurring integration-related expenses, which front-run underlying OPEC saves is also indicative of the headway we're making on cost. In the second half, we expect to book $2.3 billion of integration-related expenses, of which $1.1 billion in the third quarter.

Speaker Change: By the end of this year, we expect to have incurred around 70% of total cost to achieve our 2026 exit rate efficiency target.

Speaker Change: Moving To Our Bound.

Revenues were down 4% sequentially driven by an 8% decline in net interest income that was partly offset with increases in recurring net fees and transaction based revenues.

Speaker Change: Pnc's NII in the quarter was primarily affected by higher liquidity costs and the Smbs 25 basis point interest rate cut from March as we kept our Swiss clients deposit pricing unchanged.

Todd Tuckner: By the middle of 4Q24, we intend to adjust the sweep deposit rates in our US advisory accounts, which net of offsetting factors are expected to reduce pre-tax profits by around 50 million annually. Looking across our wealth business beyond your end, we expect an inflection point in GWM net interest income around the time implied forwards reach a structural floor and stabilize. And clients begin to releverage, driving loan balances and NII higher. Moreover, it's essential to consider that GWM's diversified and CIO-driven fee-generating business model has proven both its appeal to clients and ability to drive profitable growth, even during past periods of low or negative interest rates.

Speaker Change: In the third quarter, we expect NII to tick down sequentially by a low single digit percentage, mainly due to the effects of the SNB second 25 basis point rate cut from late June.

Todd Tuckner: In US dollar terms, we expect NII to be roughly flat sequentially. Despite these effects, as well as higher costs related to the SMB's move earlier in the quarter to raise minimum reserve requirements, we nevertheless reaffirm a full year 2024 guidance of mid- to high-single-digit percentage decline versus 4Q23 annualized, supported by our balance sheet actions. In arriving at this outlook, we are currently pricing in up to two further Swiss franc policy rate reductions of 25 basis points each by the end of 2024. Assuming Swiss franc interest rate stabilized next year as the forward rate curve presently implies, we expect shortly thereafter to see steadying volumes and an inflection point in PNC's net interest income.

Speaker Change: In U S. Dollar terms, we expect NII to be roughly flat sequentially.

Speaker Change: Despite these effects as well as higher costs related to the Smbs move earlier in the quarter to raise minimum reserve requirements. We nevertheless, reaffirm our full year 2024 guidance of mid to high single digit percentage decline versus <unk> 23 annualized supported by our balance sheet actions.

Speaker Change: <unk>.

Todd Tuckner: Consequently, in addition to increased lending, it's reasonable to expect that lower interest rates will spur increased transactional activity, mandate sales, and investments in alternatives across our wealth business. Recurring net fee income increased by 3% to 3.1 billion from higher client balances, net sales and our UBS managed account offerings showed continued momentum, contributing to a sequentially higher recurring net fee margin in the quarter. Transaction-based revenues decreased quarter on quarter to 1.1 billion, but notably increased around 14% year-on-year on an estimated combined basis.

Speaker Change: In arriving at this outlook. We are currently pricing in up to two further Swiss franc policy rate reductions of 25 basis points each by the end of 2024.

Speaker Change: Assuming Swiss franc interest rates stabilize next year as the forward rate curve presently implies we expect shortly thereafter to see steadying volumes and an inflection point in Pnc's net interest income.

Todd Tuckner: We also expect by then that our balance sheet optimization work will be largely complete, with loan pricing reflecting a more appropriate cost of risk across the Swiss credit book. These efforts are necessary to restore returns on capital deployed and net interest margin in our Swiss business to pre-acquisition levels. In this respect, we saw a net new lending outflows of 3.4 billion Swiss francs this quarter, driven by repricing of sub hurdle volumes, despite having renewed or granted new loans to our Swiss clients of around 30 billion Swiss francs in 2Q. Transaction-based revenues were up 2% mainly from higher credit card usage. Recurring net fee income gained 3% on higher custody assets.

Speaker Change: We also expect by then that our balance sheet optimization work will be largely complete with loan pricing, reflecting a more appropriate cost of risk across the Swiss credit book.

Speaker Change: These efforts are necessary to restore returns on capital deployed and net interest margin and our Swiss business to pre acquisition levels.

Todd Tuckner: With APAC up around 30%, and the Americas up over 20%, and broadly flat sequentially versus a strong first quarter. Network, both regions performed exceptionally well-instructured products as clients sought customized investment opportunities in an environment of low volatility, high interest rates, and continued global tech appeal. I would also highlight that our investments in combining GWM and IB markets and solutions capabilities in the Americas are paying off as evidence by our transactional revenue performance over the first half of the year, up around 20% versus the same period in 2023.

Speaker Change: In this respect we saw net new lending outflows of $3 4 billion Swiss francs. This quarter driven by repricing of sub hurdle volumes, despite having renewed or granted new loans to Swiss clients of around 30 billion Swiss francs in <unk>.

Speaker Change: Transaction based revenues were up 2% mainly from higher credit card usage recurring net fee income gained 3% on higher custody assets together. These non NII revenue lines up 2% demonstrate the business's effectiveness and staying close to clients and minimizing merger dis synergies.

Todd Tuckner: Sets. Together, these non-NII revenue lines, up 2%, demonstrate the business's effectiveness in staying close to clients and minimizing merger disenergies. Credit loss expense was 92 million, driven by a small number of positions in our corporate loan book, as I mentioned earlier. Even with the increased focus on risk-based pricing for maturing loan positions, our Swiss credit portfolio remains of very high quality, with an impaired loan ratio of 1.1%. For the foreseeable future, we expect CLE to remain at broadly similar levels, given an increased book size post-merger, the relative strength of the Swiss rank, and some economic softness in the main Swiss export markets.

Speaker Change: Credit loss expense was $92 million driven by a small number of positions in our corporate loan book as I mentioned earlier.

Todd Tuckner: Expenses were roughly flat quarter on quarter, excluding compensation related effects, underlying operating expenses dropped 2% sequentially. As highlighted earlier, the upcoming client account migration work is expected to be a significant driver of cost reductions in GWM throughout 2025 and into 2026.

Speaker Change: Even with the increased focus on risk based pricing for maturing loan positions, our Swiss credit portfolio remains a very high quality with an impaired loan ratio of one 1% down sequentially, albeit up versus pre credit Suisse acquisition levels.

Todd Tuckner: Turning to personal and corporate banking on slide 11, PNC delivered a second quarter pre-tax profit of 645 million Swiss francs. Revenues were down 4% sequentially driven by an 8% decline in net interest income that was partly offset with increases in recurring net fees and transaction-based revenues. PNC's NII in the quarter was primarily affected by higher liquidity costs and the SMB's 25 basis point interest rate cut from March as we kept our Swiss clients deposit pricing unchanged.

Speaker Change: For the foreseeable future, we expect <unk> to remain at broadly similar levels given increased book size post merger the relative strength of the Swiss franc and some economic softness in the main Swiss export markets.

Todd Tuckner: Operating expenses were flat sequentially. Similar to GWM, future cost reductions in P and C will be closely tied to the client account and platform migration work for Booking Center Switzerland, planned to commence by the second quarter of 2025.

Speaker Change: Operating expenses were flat sequentially.

Speaker Change: Similar to gws future cost reductions in P&C will be closely tied to the client account and platform migration work for booking center, Switzerland.

Speaker Change: <unk> to commence by the second quarter of 2025.

Todd Tuckner: On slide 12, pre-tax profit and asset management increased 26% to 228 million. This quarter's result included a gain of 28 million from the initial portion of the sale of our Brazilian real estate fund management business. In the third quarter, we expect to record an additional 60 million in underlying pre-tax profit on gains from disposals, mainly from closing the residual portions of this transaction. Net new money was negative 12 billion, with continued client demand for our SMA offering in the US and positive contribution from our China JVs, only partly compensating outflows across asset classes, particularly equities.

Speaker Change: On slide 12 pretax profit in asset management increased 26% to $228 million. This quarter's results included a gain of $28 million from the initial portion of the sale of our Brazilian real estate Fund management business.

Todd Tuckner: In the third quarter, we expect NII to tick down sequentially by a low single-digit percentage mainly due to the effects of the SMB's second 25 basis point rate cut from late June. In US dollar terms, we expect NII to be roughly flat sequentially. Despite these effects, as well as higher costs related to the SMB's move earlier in the quarter to raise minimum reserve requirements, we nevertheless reaffirm a full year 2024 guidance of mid to high single-digit percentage decline versus 4Q23 annualized, supported by our balance sheet actions.

Speaker Change: In the third quarter, we expect to record an additional $60 million and underlying pretax profit on gains from disposals, mainly from closing the residual portions of this transaction.

Speaker Change: Net new money was negative 12 billion with continued client demand for our SMA offering in the U S and positive contribution from our China JV is only partly compensating outflows across asset classes, particularly equities.

Todd Tuckner: In arriving at this outlook, we are currently pricing in up to two further Swiss franc policy rate reductions of 25 basis points each by the end of 2024. Assuming Swiss franc interest rate stabilized next year as the forward rate curve presently implies, we expect shortly thereafter to see steadying volumes and an inflection point in PNC's net interest income. We also expect by then that our balance sheet optimization work will be largely complete with loan pricing reflecting a more appropriate cost of risk across the Swiss credit book.

Todd Tuckner: While our integration efforts to consolidate platforms may constrain AM's net new money performance over the next few quarters, we expect our enhanced global reach and increase scale in alternatives and indexing to at least partially offset these headwinds. Net management fees dropped by percent as outflows and select active products weighed on margins. Performance fees were roughly stable in the quarter. During 2Q, AM made strong progress in improving operational efficiency, a key focus area I highlighted during the investor update earlier this year. Operating expenses were 9% lower sequentially on reductions across both non-personnel and personnel costs, partially supported by lower variable compensation.

Speaker Change: While our integration efforts to consolidate platforms may constrain aam's net new money performance over the next few quarters, we expect our enhanced global reach and increased scale in alternatives and indexing to at least partially offset these headwinds.

Speaker Change: Net management fees dropped 5% as outflows in select active products weighed on margins performance.

Speaker Change: Performance fees were roughly stable in the quarter.

Speaker Change: During two <unk> a M made strong progress in improving operational efficiency are key focus area I highlighted during the investor update earlier this year.

Speaker Change: Operating expenses were 9% lower sequentially on reductions across both non personnel and personnel costs, partially supported by lower variable compensation.

Todd Tuckner: These efforts are necessary to restore returns on capital deployed and net interest margin in our Swiss business to pre-acquisition levels. In this respect, we saw a net new lending outflows of 3.4 billion Swiss francs this quarter, driven by repricing of sub hurdle volumes, despite having renewed or granted new loans to our Swiss clients of around 30 billion Swiss francs in 2Q. Transaction-based revenues were up 2% mainly from higher credit card usage, recurring net fee income gained 3% on higher custody assets.

Todd Tuckner: The sequential decline in variable comp is expected to normalize in the third quarter.

Speaker Change: Some of the sequential decline in variable comp is expected to normalize in the third quarter.

Speaker Change: Onto our investment bank's performance on slide 13, which as in prior quarters I compare on a year over year basis.

Todd Tuckner: Onto our investment banks' performance on slide 13, which, as in prior quarters, I compare on a year-over-year basis. The IB delivered a strong second quarter result, with improving capital markets activity supporting an excellent banking quarter. Our market's businesses perform well in an environment reflecting mixed market trends, in particular low volatility in equities, rates and effects, as well as lower cash equity volumes in APAC where we're overweight. Operating profit was 412 million, up from an operating loss of 14 million a year earlier and up 2% sequentially, as the investment banking backdrop continues to improve. Investments to deepen our U.S.

Speaker Change: The IV delivered a strong second quarter result, with improving capital markets activities supporting an excellent banking quarter.

Speaker Change: Our markets businesses performed well in an environment, reflecting mixed market trends in particular, low volatility and equities rates and FX as well as lower cash equity volumes in APAC, where we are overweight.

Todd Tuckner: Sets. Together, these non-NII revenue lines, up 2%, demonstrate the business's effectiveness in staying close to clients and minimizing merger disenergies. Credit loss expense was 92 million, driven by a small number of positions in our corporate loan book, as I mentioned earlier. Even with the increased focus on risk-based pricing for maturing loan positions, our Swiss credit portfolio remains of very high quality, with an impaired loan ratio of 1.1%. For the foreseeable future, we expect CLE to remain at broadly similar levels, give an increased book size post-merger, the relative strength of the Swiss rank, and some economic softness in the main Swiss export markets.

Speaker Change: Operating profit was $412 million up from an operating loss of $14 million, a year earlier and up 2% sequentially as the investment banking backdrop continues to improve.

Speaker Change: Investments to deepen our U S presence are having a positive impact on revenues as our contributions of credit Suisse talent across key sectors of banking and markets.

Todd Tuckner: Presence are having a positive impact on revenues as our contributions of credits to its talent across key sectors of banking and markets. Underlying revenues grew by 26% to 2.5 billion, with nearly two thirds of the increase coming from the Americas. I would highlight that our revenue growth was achieved with broadly similar levels of RWA, as the IB continues to manage within the Group RWA limit of 25% excluding NCL. Banking revenues were up 55% as we outform global fee pools, both in capital markets and advisory. Since the end of 2023, we have gained over a percentage point in market share in each of our strategic banking initiatives, including M&A and sponsors in the Americas.

Speaker Change: Underlying revenues grew by 26% to $2 5 billion with nearly two thirds of the increase coming from the Americas.

Speaker Change: I would highlight that our revenue growth was achieved with broadly similar levels of <unk> as the IV continues to manage within the group are W. A limit of 25% excluding NCL.

Speaker Change: Banking revenues were up 55% as we outperformed global fee pools.

Speaker Change: In capital markets and advisory.

Speaker Change: Since the end of 2023, we have gained over a percentage point in market share in each of our strategic banking initiatives, including M&A and sponsors in the Americas regionally APAC saw revenues nearly doubled while the U S was up 83%.

Todd Tuckner: Regionally, APAC saw revenues nearly double, while the U.S. was up 83%. Amia declined by 3% against a very strong prior period. Capital markets revenues were up 82% year over year, with an outstanding LCM performance, reflecting an increase in refinancing activity, mainly in the U.S. Advisory revenues increased by 23%, as we've leveraged our strong position in APAC to benefit from increased activity and perform well in the Americas. The strength of our fully integrated coverage teams is visible in our ability to win new mandates, where we rank seventh globally and announce M&A volumes, making for an encouraging deal pipeline.

Speaker Change: <unk> declined by 3% against the very strong prior period.

Speaker Change: Capital markets revenues were up 82% year over year with an outstanding LCM performance, reflecting an increase in refinancing activity mainly in the U S advisory revenues increased by 23% as we leveraged our strong position in APAC to benefit from increased activity and performed well in the Americas.

Yes.

Speaker Change: The strength of our fully integrated coverage teams is visible in our ability to win new mandates, where we ranked seventh globally in announced M&A volumes, making for an encouraging deal pipeline.

Todd Tuckner: While our integration efforts to consolidate platforms may constrain AM's net new money performance over the next few quarters, we expect our enhanced global reach and increase scale in alternatives and indexing to at least partially offset these headwinds. Net management fees dropped by percent as outflows and select active products weighed on margins. Performance fees were roughly stable in the quarter. During 2Q AM made strong progress in improving operational efficiency, a key focus area I highlighted during the investor update earlier this year. Operating expenses were 9% lower sequentially on reductions across both non-personnel and personnel costs, partially supported by lower variable compensation. The sequential decline in variable comp is expected to normalize in the third quarter.

Todd Tuckner: While we expect to continue capturing market share, macro and geopolitical factors are likely to weigh on continued sequential banking revenue growth in the near term. Revenues and markets reached 1.8 billion, the best second quarter result in over a decade, up 18% year on year and driven by the Americas, up nearly 40%. Equities revenues were up 17%, driven by both derivatives and cash, where we have seen material gains in market share. FRC was up 20% with broad increases across FX, credit, and rates, benefiting from higher client activity, particularly in FX and rates options, partially offset by lower activity and spread compression that affected our rates flow business.

Speaker Change: While we expect to continue capturing market share macro and geopolitical factors are likely to weigh on continued sequential banking revenue growth in the near term.

Speaker Change: Revenues in markets reached one 8 billion the best second quarter result in over a decade up 18% year on year and driven by the Americas up nearly 40%.

Speaker Change: Equities revenues were up 17% driven by both derivatives and cash where we have seen material gains in market share.

Speaker Change: <unk> was up 20% with broad increases across FX credit and rates benefiting from higher client activity, particularly in FX and rates options, partially offset by lower activity and spread compression that affected our rates flow business.

Todd Tuckner: Onto our investment banks performance on slide 13, which as in prior quarters I compare on a year-over-year basis. The IB delivered a strong second quarter result with improving capital markets activity supporting an excellent banking quarter. Our market's businesses perform well in an environment reflecting mixed market trends, in particular low volatility in equities, rates and effects, as well as lower cash equity volumes in APAC where we're overweight. Operating profit was 412 million, up from an operating loss of 14 million a year earlier and up 2% sequentially as the investment banking backdrop continues to improve.

Todd Tuckner: Operating expenses rose 12%, predominantly reflecting higher variable compensation linked to improved performance.

Speaker Change: Operating expenses rose, 12% predominantly reflecting higher variable compensation linked to improved performance.

Todd Tuckner: Moving to slide 14, non-coron legacies pre-tax loss in the quarter was 80 million, supported by around 400 million in revenues, principally from gains on position exits across corporate credit and securities products, and further reductions in the NCL cost base. Underlying FX was down 37% sequentially, held by releases and litigation reserves of 172 million. Excluding litigation, operating expenses declined by 17%, as we made strong progress driving down personnel costs and third party spend. NCL's six-month pre-tax profit of 117 million, which far exceeds earlier loss expectations, demonstrates the business's skillful management in de-risking its portfolios and rapidly cutting its costs.

Speaker Change: Moving to slide 14.

Speaker Change: Noncore and legacy pretax loss in the quarter was $80 million supported by around $400 million in revenues principally from gains on position exits across corporate credit and securitized products and further reductions in the NCL cost base.

Speaker Change: Underlying opex was down 37% sequentially helped by releases and litigation reserves of $172 million.

Speaker Change: Excluding litigation operating expenses declined by 17% as we made strong progress driving down personnel costs and third party spend.

Todd Tuckner: Investments to deepen our U.S, presence are having a positive impact on revenues as our contributions of credits to its talent across key sectors of banking and markets. Underlying revenues grew by 26% to 2.5 billion, with nearly two thirds of the increase coming from the Americas. I would highlight that our revenue growth was achieved with broadly similar levels of RWA, as the IB continues to manage within the Group RWA limit of 25% excluding NCL.

Speaker Change: NCL six month pre tax profit of $117 million, which far exceeds earlier loss expectations demonstrates the businesses skillful management and derisking its portfolios and rapidly cutting its costs.

Todd Tuckner: For the second half of the year, we expect an underlying pre-tax loss of around $1 billion, reflecting moderate short-term upsides to revenues and continued sequential progress on cost reduction, albeit at a slower rate than observed over recent quarters. Moving to slide 15, over the last four quarters, NCL has made impressive progress running down its costs across all lines, cutting its underlying operating spend space by over $2 billion. NCL has also excelled in running down its balance sheet positions, significantly contributing to group capital efficiency, releasing $5 billion in capital as a result of its efforts. Additionally, NCL has cut its non-operational risk-weighted assets by almost 60% over the last year, including by another $8 billion in this quarter, mainly from actively exiting positions across its portfolios, notably in investment grade and high yield tax of corporate credit, securitized products, and macro.

Speaker Change: For the second half of the year, we expect an underlying pretax loss of around $1 billion, reflecting moderate short term upside to revenues and continued sequential progress on cost reduction, albeit at a slower rate than observed over recent quarters.

Todd Tuckner: Banking revenues were up 55% as we outform global fee pools, both in capital markets and advisory. Since the end of 2023, we have gained over a percentage point in market share in each of our strategic banking initiatives, including M&A and sponsors in the Americas. Regionally, APAC saw revenues nearly double, while the U.S, was up 83%. Amia declined by 3% against a very strong prior period. Capital markets revenues were up 82% year over year with an outstanding LCM performance, reflecting an increase in refinancing activity, mainly in the U.S.

Speaker Change: Moving to slide 15.

Speaker Change: Over the last four quarters NCL has made impressive progress running down its costs across all lines cutting its underlying operating expense base by over $2 billion or around 50%.

Speaker Change: <unk> has also excelled in running down its balance sheet positions significantly contributing to group capital efficiency, releasing 5 billion in capital as a result of its efforts.

Speaker Change: In the second quarter, we reduced risk-weighted assets by a further $15 billion, of which $8 billion from the active rundown of positions in our non-Corinne legacy portfolio, which I will come back to shortly. Over $8 billion of the decline was seen across the core business divisions.

Speaker Change: Additionally, NCL has cut its non operational risk weighted assets by almost 60% over the last year, including by another $8 billion. This quarter, mainly from actively exiting positions across its portfolios, notably in investment grade and high yield corporate credit securitized products and macro.

Todd Tuckner: Advisory revenues increased by 23%, as we've leveraged our strong position in APAC to benefit from increased activity and perform well in the Americas. The strength of our fully integrated coverage teams is visible in our ability to win new mandates where we rank seventh globally and announce M&A volumes, making for an encouraging deal pipeline. While we expect to continue capturing market share, macro and geopolitical factors are likely to weigh on continued sequential banking revenue growth in the near term.

Todd Tuckner: Similarly, NCL's LRD is down by over 60% since 2Q23, dropping another $40 billion of leverage exposure this quarter, reflecting lower notionals as well as lower levels of HQLA. In terms of book closures, NCL shuddered another 10% of its active books in the quarter, bringing the total since last June to around 45%. Looking ahead, the progress we're making is visible in the natural roll-off profile, significantly narrowing the gap to our active rundown expectation of around 5% of group RWA by 2026. Further supporting this, and as additional evidence of NCL's proficiency in derisking its balance sheet and driving down costs, yesterday we agreed to sell Credit Suisse's U.S. mortgage servicing business.

Speaker Change: Similarly, Ngls L. R. D is down by over 60% since two to 'twenty three dropping another 40 billion of leverage exposure this quarter, reflecting lower notional <unk> as well as lower levels of HQ L. A.

Speaker Change: In terms of book closures NCL shuttered another 10% of its active books in the quarter, bringing the total since last June to around 45%.

Todd Tuckner: Revenues and markets reached 1.8 billion, the best second quarter result in over a decade, up 18% year on year and driven by the Americas, up nearly 40%. Equities revenues were up 17%, driven by both derivatives and cash, where we have seen material gains in market share. FRC was up 20% with broad increases across FX, credit and rates, benefiting from higher client activity, particularly in FX and rates options, partially offset by lower activity and spread compression that affected our rates flow business. Operating expenses rose 12%, predominantly reflecting higher variable compensation linked to improved performance.

Speaker Change: Looking ahead, the progress, we're making is visible and the natural roll off profile significantly narrowing the gap to our active rundown expectation of around 5% of group <unk> by 2026.

Speaker Change: Further supporting this and as additional evidence of Ncl's proficiency and derisking, its balance sheet and driving down costs.

Speaker Change: Yesterday, we agreed to sell credit Suisse's U S mortgage servicing business. This transaction is expected to close in <unk> 25, and would reduce our <unk> by around 1.3 billion L. R. D by around $1 7 billion in annualized costs by around $250 million.

Todd Tuckner: This transaction is expected to close in 1Q25, and would reduce RWA by around 1.3 billion, LRD by around 1.7 billion, and annualized costs by around 250 million.

Todd Tuckner: Moving to slide 14, non-coron legacies pre-tax loss in the quarter was 80 million, supported by around 400 million in revenues, principally from gains on position exits across corporate credit and securities products, and further reductions in the NCL cost base. Underlying FX was down 37% sequentially, held by releases and litigation reserves of 172 million, excluding litigation operating expenses declined by 17%, as we made strong progress driving down personnel costs and third party spend.

Speaker Change: Yeah.

Unknown Executive: To summarize, the second quarter demonstrated the power, scale, and secular growth potential of our franchise as we delivered strong underlying profitability and continued to make substantial progress across our integration agenda while reinforcing a balance sheet for all seasons.

Speaker Change: Mainly resulting from the financial resource optimization work in GWM and PNC. As I highlighted earlier in the year, this work is addressing sub-hurdle returns on capital deployed, including by reducing deposit and loan volume.

Speaker Change: To summarize the second quarter demonstrated the power scale in secular growth potential of our franchise as we delivered strong underlying profitability and continued to make substantial progress across our integration agenda, while reinforcing our balance sheet for all seasons with that lets open for questions.

Unknown Executive: With that, let's open for questions. We will now begin the question-and-answer session for analysts and investors. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time.

Speaker Change: The Upshot. Additional Capacity to Absorb Headwinds from Regulatory and Risk Methodology Changes, Model Harmonization Between the Two Banks and the implementation of Basel III final. Now confirmed for January 2025. While we continue active dialogue with our supervisor on various aspects of the final rules, at present, we continue to expect the Day 1 impact of Basel III Final to be around 5% of RWA, driven mainly by FRTB.

Speaker Change: <unk>.

Speaker Change: We'll update our estimates by no later than the fourth quarter as requirements firm. Our leverage ratio denominator decreased by $35 billion in the quarter. This reduction was driven by several factors, including full repayment of the Central Bank Ella facility granted to Credit Suisse.

Speaker Change: We will now begin the question and answer session for analysts and investors.

Speaker Change: Lower lending volumes, mainly from our financial resource optimization efforts, and the active rundown of our NCL portfolio.

Speaker Change: These funds are requested to use any handsets when asking a question.

Speaker Change: We ended the second quarter with an LCR of 212%, reflecting the LOE repayment, and TLAC of $198 billion.

Speaker Change: One who ask a question press star one at this time.

Todd Tuckner: NCL's six month pre-tax profit of 117 million, which far exceeds earlier loss expectations, demonstrates the business's skillful management in de-risking its portfolios and rapidly cutting its costs. For the second half of the year, we expect an underlying pre-tax loss of around $1 billion, reflecting moderate short-term upsides to revenues, and continued sequential progress on cost reduction, albeit at a slower rate than observed over recent quarters. Moving to slide 15, over the last four quarters, NCL has made impressive progress running down its costs across all lines, cutting its underlying operating spend space by over $2 billion.

Julio Roramiotto: The first question is from Julio Roramiotto from Morgan Stanley.

Speaker Change: The first question is from Giulia Aurora <unk> from Morgan Stanley. Please go ahead.

Unknown Executive: Please go ahead.

Todd Tuckner: Hi, good morning. Thank you for taking my questions. I'll ask two, please. So my first one, and thank you very much for the guidance on NII in GWM, which was something on the market was looking forward to. Can I just ask a clarification? If you look at the current forward curve, when do you expect NII to bottom exactly? Do you think second half, 24, and then we can grow, or possibly first half, 25? So that's the first question.

Giulia Aurora: Hi, Good morning, Thank you for taking my questions and ask two please.

Giulia Aurora: Turning to slide 9, our CET1 capital ratio as of quarter end was 14.9%. The numerator reflects accruals of this year's expected dividend and a reserve for 2024 share repurchase, of which we have executed $467 million of the plan $1 billion as of last Friday. Additionally, our CET1 capital includes all relevant portions of the purchase price allocation adjustments made to Credit Suisse's equity as of the acquisition date last June. With the 12-month measurement period now concluded, total PPA adjustments against the purchased equity of Credit Suisse amounted to negative $26.5 billion, of which about 70% reduced CET1 capital.

My first one thank you very much for the guidance on NII gws, but she was that.

Speaker Change: It's something that the market was looking for it to can I just ask a clarification.

Speaker Change: And if you look at the current forward curve when do you expect NII to bottom exactly do you think second half 'twenty four and then we can grow or.

Speaker Change: LCD first half 'twenty five so that's the first question and then the second question instead on.

Speaker Change: Following completion of the Parent Bank merger earlier in the quarter, next week we'll report UBS AG's consolidated and stand-alone capital ratios and other information, for the first time on a combined basis.

Todd Tuckner: And then the second question is instead on the capital of the parent. And in particular CSI, things who have a lot of excess capital and upstream, in fact, could reduce the impact, the potential impact from the proposal in Switzerland. And can we expect UBS to stream some of that capital, or how are you thinking about excess capital at some centuries. Thank you. So regarding the NII guidance, in terms of the implied forward curve, so as I mentioned, we ended up pricing in, as you saw, I modeled for a 25 basis point rate cuts through the end of the year.

Speaker Change: The capital off the bottom.

Todd Tuckner: NCL has also excelled in running down its balance sheet positions, significantly contributing to group capital efficiency, releasing $5 billion in capital as a result of its efforts. Additionally, NCL has cut its non-operational risk-weighted assets by almost 60% over the last year, including by another $8 billion in this quarter, mainly from actively exiting positions across its portfolios, notably in investment grade and high yield tax of corporate credit, securitized products, and macro. Similarly, NCL's LRD is down by over 60% since 2Q23, dropping another $40 billion of leverage exposure this quarter, reflecting lower notionals as well as lower levels of HQLA.

Speaker Change: And in particular, yes.

Speaker Change: Hi.

Speaker Change: And also excess capital and putting into that.

Speaker Change: It could reduce the impact potentially from the proposal.

Speaker Change: UBS AG's stand-alone CET1 capital ratio at quarter end is expected at 13.5% on a fully applied basis.

Speaker Change: In Switzerland.

Speaker Change: Can we expect UBS to upstream some of that capital.

Speaker Change: I'm, just thinking about excess capital at the subs.

Speaker Change: <unk>. Thank you.

Speaker Change: Yeah.

Speaker Change: So regarding the NII guidance in terms of the.

Speaker Change: The implied forward curve. So as I mentioned, we ended up pricing and as you saw on modeled for.

Speaker Change: 25 basis point rate cuts through the end of the year. If you look out you know.

Todd Tuckner: If you look out, in terms of when the implied forward curve would suggest bottoming out, probably pricing in more like seven. Depending on what you're looking at, from here, well, difficult to speculate; it could be sometime in mid-2025. But I spend time, what I think is really important to recognize is that in a lower interest rate environment, there are significant offsets and tailwinds in the business that we expect to see. And that was a point that we wanted to really ensure is well understood, because ultimately transaction revenues, re-leveraging and driving up NII from re-leveraging, and also recurring fees from mandate sales, all have upside in an environment of lower interest rates.

Speaker Change: In terms of when the implied forward curve would suggest bottoming out probably pricing in more like seven a.

Todd Tuckner: In terms of book closures, NCL shuddered another 10% of its active books in the quarter, bringing the total since last June to around 45%. Looking ahead, the progress we're making is visible in the natural roll-off profile, significantly narrowing the gap to our active rundown expectation of around 5% of group RWA by 2026. Further supporting this, and as additional evidence of NCL's proficiency in derisking its balance sheet and driving down costs, yesterday we agreed to sell Credit Suisse's US mortgage servicing business. This transaction is expected to close in 1Q25, and would reduce RWA by around 1.3 billion, LRD by around 1.7 billion, and annualized costs by around 250 million.

Speaker Change: Depending on what you are looking at so you know I mean from here, while it's difficult to speculate it could be sometime in mid 'twenty.

Speaker Change: 25, but I spent time with I think is really important to recognize is that.

Speaker Change: In a lower NII at lower interest rate environment, there are significant offsets and tailwind in the business that we expect to see and that was the point that we wanted to really ensure.

Speaker Change: As is well understood because ultimately transaction revenues.

Speaker Change: Leveraging and driving up NII from deleveraging.

Speaker Change: And also recurring fees from mandate sales all have upside in an environment of lower interest rates in terms of the parent bank capital you.

Todd Tuckner: In terms of the parent bank capital, you mentioned our U.K. Credit Suisse UK subsidiary that has exes capital; of course, we're working on restructuring and on all of our subsidiaries where we can, and ultimately, we will, as appropriate, upstream the capital in any of the subsidiaries in order to alleviate the capital of the parent bank. Thank you.

Speaker Change: To put this capital ratio in perspective, It is important to compare the way we manage our parent bank capital versus Credit Suisse's pre-acquisition practice.

Speaker Change: We provide for the complete transition of the risk weight rule changes applicable to UBS AG's subsidiary investment, which overall are valued.

Speaker Change: Moreover, we don't depend on any affiliate valuation concession from the regulators.

Speaker Change: This was not the case with Credit Suisse before the takeover, where its approach overstated the parent bank's resilience, and ultimately limited restructuring optionality.

Speaker Change: You mentioned, our U K credit Suisse's U K subsidiary that has excess capital.

Todd Tuckner: To summarize, the second quarter demonstrated the power, scale, and secular growth potential of our franchise as we delivered strong underlying profitability and continued to make substantial progress across our integration agenda while reinforcing a balance sheet for all seasons.

Speaker Change: In this context, our merged parent bank already provides for around $20 billion of additional capital resulting from the acquisition, including the progressive add-ons from growth in balance sheet and market share that will be phased in over five years starting in 2026. The result is a parent bank capital buffer of around 100 basis points above the current fully applied requirement by 2030.

Speaker Change: Moving to our business divisions and starting with global wealth management on slide.

Speaker Change: Of course, we're working on restructuring and on.

Speaker Change: GWM's pre-tax profit was $1.2 billion on revenues of $5.8 billion, which were up 3% year-over-year on an estimated combined basis.

Speaker Change: Against a complex economic backdrop, clients sought our differentiated advice and solutions as evidenced by continued strong momentum in net new asset inflows and transactional activity. Overall, we generated $27 billion of net new assets, a growth rate of 2.7%, with positive inflows across all regions.

Speaker Change: All of our subsidiaries, where we can and ultimately we will as appropriate upstream the capital in any of the subsidiaries in order to Alere.

Unknown Executive: With that, let's open for questions.

Speaker Change: Alleviate the capital at the parent bank.

Unknown Executive: We will now begin the question and answer session for analysts and investors. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time.

Speaker Change: I'm particularly pleased with this result.

Speaker Change: Thank you.

Andrew Coombs: The next question is from Andrew Coombs from CT. Please go ahead.

Speaker Change: The next question is from Andrew Coombs from Citi. Please go ahead.

Unknown Executive: Good morning. I'm actually just real down to the areas where you perhaps deliver the head of expectation. So firstly, on the non-core, another successful quarter of actively reducing the RWA, some further gains on some of those addition exits. You're now talking about narrowing that gap, the natural runoff. And the natural runoff from B.S. 6 percent, you're aiming for five. So I think that is only another five billion inside of active RWA management from that business. And now you alluded to the close of the US more service and business will get you somewhere towards that.

Andrew Coombs: Considering the variety of headwinds to net new asset growth that the business successfully navigated in the quarter, including around $6 billion in seasonal tax outflows in the U.S.

Andrew Coombs: Hi, Good morning, Thanks, just turning back to the areas, where you've actually delivered ahead of expectation.

Julio Roramiotto: The first question is from Julio Roramiotto from Morgan Stanley. Please go ahead. Hi, good morning. Thank you for taking my questions. I'll ask two please. So my first one, and thank you very much for the guidance on NII in GWM, which was something on the market was looking forward to. Can I just ask a clarification? If you look at the current forward curve, when do you expect NII to bottom exactly? Do you think second half, 24, and then we can grow, or possibly first half, 25? So that's the first question.

Andrew Coombs: Let me unpack this further. To date, we've retained the vast majority of Credit Suisse's invested assets, notwithstanding that more than 40% of Credit Suisse's wealth advisors have left since October 2022. I would also note that these relationship managers advised on only 20% of assets. Meaning that, overall, we've retained the more productive Credit Suisse advisor.

Todd Tuckner: And then the second question is instead on the capital of the parent. And in particular CSI, things who have a lot of excess capital and upstream, in fact, could reduce the impact, the potential impact from the proposal in Switzerland. And can we expect UBS to stream some of that capital or how are you thinking about excess capital at some centuries. Thank you. So regarding the NII guidance, in terms of the implied forward curve, so as I mentioned, we ended up pricing in, as you saw, I modeled for a 25 basis point race cuts through the end of the year.

Speaker Change: Testament to the Appeal of our Platform. We've also kept around 80% of the first large wave of maturing fixed-term deposits from last year's win-back, with the peak in maturity is expected in the third quarter.

Speaker Change: Furthermore, we made strong progress this quarter in our efforts to increase profitability on sub-hurdle relationships. Higher returns come from both driving increased platform revenue and proactively exiting subpar loans.

Speaker Change: Firstly on the non coal another successful quarter of <unk>.

Speaker Change: Did these actions in the court are boosting the revenue over RWA margin by around 30 basis points sequentially?

Speaker Change: Lastly, from a macro standpoint, the equity capital markets, and in particular, IPO act, Ordinarily, a significant driver of wealth creation and net new asset generation have only recently started to recover.

Speaker Change: I mean reducing of UA.

Speaker Change: Game on Sunday condition access.

Speaker Change: You are now talking about narrowing that gap been actual funnel so based on the natural gas.

Dan: It's Dan.

Dan: You're aiming for bi.

Daniel: Hey, Daniel.

Speaker Change: Many of them buy tobacco W added management.

Daniel: Okay.

Daniel: Matt you alluded to that claim.

Daniel: In U S mortgage servicing business semis.

Unknown Executive: So should we assume that the active management within the NCL book is now largely complete, or will be largely complete by the end of this year.

Speaker Change: We have seen that.

Speaker Change: Active management of India in Seattle.

Speaker Change: Is now largely complete and will be largely complete.

Speaker Change: Yeah.

Unknown Executive: And then my second question is just of cost. Previously, I think you expected to be at 50% by N24, you know, 55% guiding by N24 of the total cost sales target. So next to 500 million of cost sales, you've realized earlier than expected. Which provisions is it that those cost sales are coming through earlier than expected. And in your mind, it's purely just a timing issue that coming through earlier as opposed to a quantum issue that you're delivering more cost sales and expected.

Speaker Change: And then my second question to system costs previously I think your expenses.

Speaker Change: Bye bye.

Speaker Change: 5% guiding.

Speaker Change: <unk> 20 of net cost savings target of $500 million I'll say, you realized any of it.

Todd Tuckner: If you look out, in terms of when the implied forward curve would suggest bottoming out, probably pricing in more like seven. Depending on what you're looking at, from here, well, difficult to speculate, it could be sometime in mid-2025, but I spend time, what I think is really important to recognize is that in a lower interest rate environment, there are significant offsets and tailwinds in the business that we expect to see. And that was a point that we wanted to really ensure is well understood, because ultimately transaction revenues, re-leveraging and driving up NII from re-leveraging, and also recurring fees from mandate sales, all have upside in an environment of lower interest rates.

Speaker Change: And expected.

Which division is it.

Speaker Change: As cost saves are coming.

Speaker Change: Earlier than expected and in your mind.

Speaker Change: Just the timing issue coming through and yes, I can pay for quantum issue.

Delivering more cost savings we expected.

Speaker Change: Yeah.

Unknown Executive: Yeah, thanks a lot, Andrew. So on the second one, in terms of the costs and the performance and outperformance, we're continuing to see, I mean, that's really driven, as I highlighted in my comments, by NCL, for sure. NCL has driven the Ryan share of the gross cost saves to date, while the other divisions are contributed. It has been really a function of their active rundown of positions, but also the restructuring of various parts of credits, which is a G-SIB that we've highlighted in the past is an important part of taking out costs, and a lot of those costs reside, you know, in NCL.

Speaker Change: Yeah, Thanks, a lot Andrew and so on.

Speaker Change: On the second one in terms of the on.

Speaker Change: On the costs and the <unk>.

Speaker Change: The performance and outperformance were continuing to see I mean, that's really driven as I highlighted in my comments by NCL.

Speaker Change: For sure NCL has driven the lion's share of the of the gross cost saves to date, while the other divisions have contributed it has been a really a function of their active rundown of positions, but also.

Speaker Change: The restructuring of various parts of credit Suisse as a G. SIB that we've highlighted in the past is an important part of taking out costs and a lot of those costs reside.

Speaker Change: In an NCL so they've been really the benefactor of the cost performance and as we look out towards the end of the year. The additional progress that we anticipate even though as I suggest we expect a bit of moderate moderate deceleration in the gross cost saves.

Unknown Executive: So they've been really the benefactor of the cost performance. And as we look out towards the end of the year, the additional progress that we anticipate, even though, as I said, we suggest we expect a moderate acceleration in the gross cost saves that's expected to be yielded also by NCL.

Todd Tuckner: In terms of the parent bank capital, you mentioned our U.K. Credit Suisse UK subsidiary that has exes capital, of course, we're working on restructuring and on all of our subsidiaries where we can, and ultimately, we will, as appropriate upstream the capital in any of the subsidiaries in order to alleviate the capital of the parent bank. Thank you.

Andrew Coombs: The next question is from Andrew Coombs from CT, please go ahead.

Speaker Change: That's expected to be yielded also by our NCL and as I highlighted the core business divisions will then it'll the ratio of core to non core or non core to core in terms of cost takeout will invert as we get into the second half of the.

Unknown Executive: And as I highlighted, you know, the core business divisions will then, the ratio of core to non-core or non-core to core in terms of cost takeout will invert as we get into the second half of the integration agenda, and we'll start to see the significant cost reduction. And just on the first, in terms of how we see the natural runoff and the success we've had in the quarter, of course, we're not counting on extrapolating, and we take economic decisions as they arise, and the opportunities arise. So, you know, difficult to extrapolate the great outcome that we've had to date to suggest a different outcome than the natural runoff, and that's why we continue to disclose it.

Speaker Change: Of the integration agenda, and we'll start to see the significant cost reductions hitting through in particular gws.

Andrew Coombs: Good morning. I'm actually just real down to the areas where you perhaps deliver the head of expectation. So firstly, on the non-core, another successful quarter of actively reducing the RWA, some further gains on some of those addition exits, you're now talking about narrowing that gap, the natural runoff. And the natural runoff from B.S.6 percent, you're aiming for five. So I think that is only another five billion inside of active RWA management from that business. And now you alluded to the close of the US more service and business will get you somewhere towards that.

Andrew Coombs: So should we assume that the active management within the NCL book is now largely complete or will be largely complete by the end of this year.

Speaker Change: And and PNC and then and just on the first in terms of how we see the the natural run off and the success. We've had in the in the quarter. You know of course, we're not counting on extrapolating and we take.

Speaker Change: These dynamics underscore the basis of our short-term annual guidance of $100 billion for 2024 and 2025 and equally the resilience of our net new asset achievement in the quarter, as well as the high level of client conviction in our advice and solutions.

Speaker Change: Economic decisions as they arise and the opportunities arise so.

Speaker Change: Difficult to extrapolate the great outcome that we've had to date to suggest a different outcome than than.

Speaker Change: And the natural roll off and that's why we continue to disclose it so.

Unknown Executive: So, you know, that becomes clear what is important in Sergio commented this in his remarks that, you know, the uncertainty delta continues to narrow. And that's what, you know, I think it's important that, you know, ultimately, while we can't count on anything in particular in terms of what can come off the balance sheet of NCL in terms of extrapolation, what we can say is that the uncertainty delta has narrowed very significantly.

Speaker Change: That becomes clearer what is important and Sergio commented this in his in his remarks that the.

Sergio <unk>: The uncertainty Delta continues to narrow and that's what I think is important that you know.

Andrew Coombs: And then my second question is just of cost previously, I think you expected to be at 50% by N24, you know, 55% guiding by N24 of the total cost sales target. So next to 500 million of cost sales, you've realized earlier than expected. Which provisions is it that those cost sales are coming through earlier than expected. And in your mind, it's purely just a timing issue that coming through earlier as opposed to a quantum issue that you're delivering more cost sales and expected.

Sergio <unk>: Ultimately, while we can't count on anything in particular in terms of what can come off the balance sheet of NCL in terms of extrapolation of what we can say is that the uncertainty delta has narrowed very significantly.

Sergio <unk>: Yeah.

Sergio <unk>: Okay.

Unknown Executive: That's clear, thank you. I guess the following would just be your previous guidance, which for a typical run rate of close to zero revenues from NCL, a quarter, and presumably that's unchanged. Yeah, as I said, Andrew, that we see in the long term, that's for sure the case. In the short term, i.e., the 2H guidance that I offered, we see some modest upside to current book values on the revenue side, so some modest uptake in driving the billion underlying PBT loss guidance that I offered in my comments.

Speaker Change: That's clear thank you.

Speaker Change: Final one would be just be your previous guidance was for <unk>.

Speaker Change: Run rate of close to zero revenues remain at courtyard and forgive me that's unchanged.

Speaker Change: Yeah, as I said, Andrew that we see in the in the long term that's for sure. The case in the in the short term I E. The two H guidance that I offered we see some modest upside to current book values.

Todd Tuckner: Yeah, thanks a lot, Andrew. So on the second one, in terms of on the costs and the performance and outperformance, we're continuing to see, I mean, that's really driven, as I highlighted in my comments by NCL, for sure. NCL has driven the Ryan share of the of the gross cost saves to date, while the other divisions are contributed, it has been really a function of their active rundown of positions, but also the restructuring of various parts of credits, which is a g-sib that we've highlighted in the past is an important part of taking out costs, and a lot of those costs reside, you know, in NCL.

Speaker Change: On the revenue side, so some modest uptake in and driving the 1 billion are.

Speaker Change: Underlying PBT loss.

Speaker Change: Guidance that I offered in my comments.

Speaker Change: Thank you.

Jeremy Sigee: The next question is from Jeremy Sigee from BNP Paribas. Please go ahead. And then my second question, just a more sort of specific one on investment banking costs; they drifted up a little bit more than revenues in the second quarter. It's not a big move, but the costing come deteriorated against those strong revenues rather than perhaps a amount of hope to improve a little bit. So any comments on the drivers, whether there's any one-off in there or anything unusual, just how we should interpret that I be cost number please.

Jeremy <unk>: Now on to details of GWM's financial performance.

Jeremy <unk>: The next question is from Jeremy <unk> from BNP Paribas. Please go ahead.

Jeremy <unk>: Revenues declined 2% sequentially as lower NII and the expected sequential drop in transactional activity were partially offset by growth in recurring net fee income supported by higher average levels of fee generating assets. Net interest income decreased by 2% sequentially to $1.6 billion, driven by ongoing deposit mix shifts and declining loan volume, partially offset by our repricing action, which as mentioned support higher returns on capital and net interest margin.

Jeremy <unk>: Hi, Thank you two questions. Please the first one just follows on from just exactly what you were talking about the guidance for the P&L drag from NCL.

Speaker Change: Obviously, it's going better than expected, which is which is great to see.

Speaker Change: What would we expect now previously you were talking about 2 billion P&L drag exit rates in 2025, and then 1 billion exiting 2026, and obviously, it's going much better than that with sort of a 1 billion drag in the second half that youre integrating what should we expect for 2025 and.

Todd Tuckner: So they've been really the benefactor of the cost performance. And as we look out towards the end of the year, the additional progress that we anticipate, even though as I said, we suggest we expect a moderate acceleration in the gross cost saves that's expected to be yielded also by NCL. And as I highlighted, you know, the core business divisions will then, the ratio of core to non-core or non-core to core in terms of cost takeout will invert as we get into the second half of the integration agenda, and we'll start to see the significant cost reduction.

Speaker Change: Could could be NCL drag be finished within 2025, rather than carrying on into 2026 any update on that would be would be really helpful.

Speaker Change: And then my second question, just a more specific one on investment banking costs.

Speaker Change: They drifted up a little bit more than revenues in the second quarter, it's not a big move but.

Speaker Change: The cost income deteriorated.

Speaker Change: So strong revenues rather than perhaps some other type of ticket have improved a little bit so any comments on the drivers whether there is any one off in there or anything unusual just how we should interpret that IV cost number. Please.

Todd Tuckner: And just on the first, in terms of how we see the natural runoff and the success we've had in the quarter, of course, we're not counting on extrapolating, and we take economic decisions as they arise, and the opportunities arise. So, you know, difficult to extrapolate the great outcome that we've had to date to suggest a different outcome than the natural runoff, and that's why we continue to disclose it. So, you know, that becomes clear, what is important in Sergio commented this in his remarks that, you know, the uncertainty Delta continues to narrow.

Unknown Executive: So Jeremy, thanks. On the second one, in the comp on IB cost, it's the comp quarter, of course, only has Credit Swiss personnel in for a short period of time for just the one month when you look at the year-on-year comp, whereas the current quarter has the people we've added for the full quarter. So that's driving that variance. I'm sorry; I was thinking Q and Q. I think the costs are up 3% and the revenues are up 1%. So I was thinking more Q and Q. Yeah, on Q on Q it would be just some some some compensation related effects that we're hitting through driving the Q on Q, but I'd have to back and look at that. But really it's more the year on year that we're focused on.

Speaker Change: So Jeremy Thanks, so on the second one.

Jeremy <unk>: In the comp on an IV cost it's the comp quarter are of course only has.

Speaker Change: Credit Suisse personnel in for.

Speaker Change: A short period of time for just the one month when you look at the.

Speaker Change: The year on year comp, whereas the current quarter has you know the people we've added for the full quarter. So that's driving that that variance.

Todd Tuckner: And that's what, you know, I think it's important that, you know, ultimately, while we can't count on anything in particular in terms of what can come off the balance sheet of NCL in terms of extrapolation, what we can say is that the uncertainty Delta has narrowed very significantly.

Speaker Change: Thank you I was thinking Q on Q I think the costs are up 3% and the revenues are up 1%. So I was thinking more Q on Q.

Speaker Change: Oh yeah.

Speaker Change: On Q on Q it would be just some.

Speaker Change: Some compensation related effects that.

Speaker Change: We're hitting through driving the Q on Q, but I'd have to go back and look at that but really it's more of a year on year that we're.

Speaker Change: Focused on.

Andrew Coombs: That's clear, thank you. I guess the following would just be your previous guidance, which for a typical run rate of close to zero revenues from NCL, a quarter, and presumably that's unchanged. Yeah, as I said, Andrew, that we see in the long term, that's for sure the case, in the short term, IE the 2H guidance that I offered, we see some modest upside to current book values on the revenue side, so some modest uptake in driving the billion underlying PBT loss guidance that I offered in my comments.

Unknown Executive: On the in terms of the guidance on the P&L drag in NCL in terms of what we should expect look. I mean we're really pleased with the performance we've had to date. As I said in my last comments, there is no way to extrapolate from that performance a straight line and to assume that that's the, you know, the pace of which will continue. So you know we our guidance remains that's where in terms of the P&L drag at the end of 26 is right now still our best estimate. When we come back and talk about an outlook in the fourth quarter going forward, you know potentially we update that and see where we are, but for now that's that's our best estimate in terms of where where we land.

Speaker Change: On the in terms of the guidance on the P&L drag and and N C. L. In terms of what we should expect look I mean, we're really pleased with the performance we've had to date as I said in our in.

And in my last comments, there's no way to extrapolate from that performance a straight line and to assume that that's the you know the pace of which will continue so.

Speaker Change: Our guidance remains that's where in terms of the P&L drag.

Speaker Change: At the end of 'twenty six is right now still our best estimate when we come back and talk about our outlook in the fourth quarter going forward.

Speaker Change: Generally we update that and see where we are but for now.

Jeremy Sigee: The next question is from Jeremy Sigee from BNP Paribas, please go ahead. And then my second question, just a more sort of specific one on investment banking costs, they drifted up a little bit more than revenues in the second quarter. It's not a big move, but the costing come deteriorated against those strong revenues rather than perhaps a amount of hope to improve a little bit.

Speaker Change: That's our that's our best estimate in terms of where where we land.

Speaker Change: Understood. Thank you very much.

Kian Abouhossein: The next question is from Kean Abos and from JP Morgan. Please go ahead. Yeah, thanks for taking my questions. The first one is related to wealth management. First of all, thanks again, taught for the disclosure. I hope some of the US peers are listening, as this was very helpful relative to what I heard before from US peers. Sweet deposits last disclosure of 35.7 billion, I was wondering where we are roughly right now in the US entity. If you could also share advice and share with us the advisory part of that so we can kind of understand the adjustment factor and what rate you are paying now versus what rate you will be paying for these sweet deposits on this advisory mandate.

Ken <unk>: Looking towards your end.

Ken <unk>: The next question is from Ken <unk> from J P. Morgan. Please go ahead.

Ken <unk>: We maintain our previous guidance that full year 2024 NII will be roughly flat versus 4Q23 annualized. This includes a low-to-mid single-digit percentage sequential drop in the third quarter. Driven by a decrease in volume.

Ken <unk>: Mixed Shifts in Anticipation of Falling Rates and the Impact on our Replication Portfolio. In arriving at this outlook, and in light of recent rates volatility, we're modeling 100 basis points of US dollar policy rate reductions by the end of 2024.

Ken <unk>: The Outlook for Net Interest Income in our U.S.

Ken <unk>: Yes, thanks for taking my questions. The first one is related to wealth management.

Speaker Change: Thanks again for the.

Speaker Change: Wealth, is expected to be influenced by competitive dynamics affecting the pricing of sweep deposits. By the middle of 4Q24, we intend to adjust the sweep deposit rates in our U.S. advisory, which net of offsetting fact, are expected to reduce pre-tax profits by around $50 million annually.

Speaker Change: The disclosure I hope some of the USPS and listening.

Speaker Change: That's very helpful relative what I heard before from U S peers.

Speaker Change: Looking across our wealth business beyond year-end.

Sweep deposits last disclosure was $35 7 billion I was wondering where we are roughly right now in the U S entity.

Speaker Change: If you could also see ads I share was asking advisory part of that so we can kind of understand.

Speaker Change: The adjustment factor and want to wait you are paying now versus what you will be paying for the sweep deposits on these advisory mandates.

Unknown Executive: and in that context, if you could briefly talk about lending, which was down XUS, just to understand how much of that is related to adjustments of your offering to the CS clients versus actually losses in lending. And then the second question is on legal entity on page 90 is a very useful chart. And you talk about further legal entity simplification the US. Yes, as well as the UK legal entity going into a branch, I was wondering what capital relief you expect from that or maybe even in subjective terms if you can talk a little bit about the changes that will happen.

Speaker Change: And in that context can you briefly talk about lending, which was down ex U S. Just to understand.

Jeremy Sigee: So any comments on the drivers, whether there's any one-off in there or anything unusual, just how we should interpret that I be cost number please. So Jeremy, thanks. On the second one, in the comp on IB cost, it's the comp quarter, of course only has credit Swiss personnel in for a short period of time for just the one month when you look at the year on year comp, whereas the current quarter has the people we've added for the full quarter.

Speaker Change: How much of that is related to.

Speaker Change: Adjustments of your of your offering to the CF climbs versus X gene losses in lending.

Speaker Change: And then the second question was on legal entity on page nine teams very useful chart.

Speaker Change: And <unk>.

Speaker Change: You talk about further legal entity simplification in the U S as well as the U K legal entity going into a branch I was wondering what capital relief you expect from that or maybe even in.

Speaker Change: Subjective terms, if you can talk a little bit about the changes that will happen.

Jeremy Sigee: So that's driving that variance. I'm sorry, I was thinking Q and Q, I think the costs are up 3% and the revenues are up 1%. So I was thinking more Q and Q. Yeah, on Q on Q it would be just some some some compensation related effects that we're hitting through driving the Q on Q, but I'd have to back and look at that, but really it's more the year on year that we're focused on.

Unknown Executive: Then then you then you describe it here on the page.

Speaker Change: And then you described the key on the page.

Unknown Executive: Thanks, Kim, for the question. So on in terms of the second one, first, the simplification that we talk about is continuing in the UK and the US, but also in other parts of the world to continue merging subsidiaries out of existence to create an unlock for capital funding and tax efficiencies. So that's what we're getting to. So we're working all through that. You know, we just, of course, did the big parent bank and Swiss bank mergers; we reparented the IAC, but now there's still a lot of work that will continue to unlock these benefits. So, in terms of capital relief, naturally, to the extent that, and this goes a little bit to the question that was asked earlier in terms of the repatriation of excess capital, say in a subsidiary, of course, that is part of the analysis that we go through as we work through it.

Speaker Change: Thanks, Ken for the question so on in terms of the second one first the.

Speaker Change: The simplification that we talk about is continuing.

Speaker Change: In the U K and the U S. But also in other parts of the world to continue emerging subsidiaries out of existence to create and unlock more of capital funding and tax efficiencies. So that's what we're getting to so we're working all through that we just of course did the big parent bank in Swiss Bank merger.

Todd Tuckner: On the in terms of the guidance on the P&L drag in in NCL in terms of what we should expect look I mean we're really pleased with the performance we've had to date as I said in in my last comments is no way to extrapolate from that performance a straight line and to assume that that's the you know the pace of which will continue. So you know we our guidance remains that's where in terms of the P&L drag at the end of 26 is right now still our best estimate when we come back and talk about an outlook in the fourth quarter going forward, you know potentially we update that and see where we are, but for now that's that's our best estimate in terms of where where we land.

Speaker Change: There's we read.

Speaker Change: We parented the IAC, but now there's still a lot of work that will continue to unlock these benefits so in terms of copper.

Speaker Change: Capital relief naturally to the extent that.

Speaker Change: And this goes a little bit to the question that was asked earlier in terms of the repatriation of excess capital say in a subsidiary of course that is is.

Speaker Change: As part of the analysis that we go through.

Speaker Change: As we work through it but it's you know there are contingencies to the timeline in terms of.

Unknown Executive: But it's, you know, there are contingencies to the timeline in terms of what triggers and what the timing could be to merge some of these entities out of existence.

Speaker Change: Of what triggers and what the timing could be two to merge some of these entities out of existence.

Unknown Executive: In terms of GWM, so, you know, what I, what I could say on the, on the, on the sweep deposits. First of all, advisory is about a third of the total; the total that we have in sweeps. So just to give to dimension that a bit is, I think, that's probably useful to understand. And then as far as, you know, the pricing it goes, of course, the way where we're, first of all, it's a function of interest rates because I mentioned we're going to introduce the new rates and advisory in the fourth quarter because we have to change systems and go through some transitional work to get there.

Speaker Change: We expect an inflection point in GWM net interest income around the time implied forwards reach a structural floor and stabilize, and clients begin to re-leverage, driving loan balances and NII higher.

Speaker Change: In terms of Gws. So you know what I, what I can say on the on the on the sweep deposits.

Speaker Change: Moreover, it's essential to consider that GWM's diversified and CIO-driven fee-generating business model has proven both its appeal to clients and ability to drive profitable growth, Even during past periods of low or negative interest rates.

Kian Abouhossein: The next question is from Kean Abos and from JP Morgan, please go ahead. Yeah, thanks for taking my questions. The first one is related to wealth management. First of all, thanks again, taught for the disclosure. I hope some of the US peers are listening as this was very helpful relative what I heard before from US peers. Sweet deposits last disclosure of 35.7 billion, I was wondering where we are roughly right now in the US entity.

Kian Abouhossein: If you could also share advice and share with us the advisory part of that so we can kind of understand the adjustment factor and what rate you are paying now versus what rate you will be paying for these sweet deposits on this advisory mandate, and in that context, if you could briefly talk about lending which was down XUS, just to understand how much of that is related to adjustments of your offering to the CS clients versus actually losses in lending. And then the second question is on legal entity on page 90 is a very useful chart.

Speaker Change: First of all advisory is about a third of the total.

Speaker Change: The total that we have in sweeps. So just to give a to dimension that a bit because I think that's probably useful to understand.

Speaker Change: And then as far as.

Speaker Change: You know the the pricing it goes of course, the way, where we're first of all it's a function of interest rates because I mentioned, we're going to introduce.

Speaker Change: The new rates in advisory in the fourth quarter, because we have to change systems in and go through.

Speaker Change: Some transitional work to get there so.

Unknown Executive: So, so we have to see also where interest rates are, so in terms of an absolute price that I can offer. But what I can say is that we will for sure price in the value of the insurance coverage we offer on deposits that benefit from multiple programs, multiple bank programs, and reciprocal programs that we've invested in. And that will feature into, into the, into the price of the rate we ultimately offer. In terms of lending balances, XUS, the main driver of that, I mean, you know, clearly, we've seen, we've seen de-leveraging in a higher interest rate market for outside the US, particularly in APAC for several quarters running.

Speaker Change: So we have to see also where interest rates are so in terms of an absolute price that I can't offer.

Speaker Change: But what I can say is that we.

Speaker Change: We will for sure price and the value of the insurance coverage, we offer on deposits that benefit from multiple programs multiple.

Speaker Change: Bank programs and reciprocal programs that we've invested in.

Speaker Change: And that will feature into our into the into the price of the rate we ultimately offer.

Speaker Change: In terms of lending balances ex U S. The main driver of that I mean, clearly we've.

Kian Abouhossein: And you talk about further legal entity simplification the US. Yes, as well as the UK legal entity going into a branch, I was wondering what capital relief you expect from that or maybe even in subjective terms if you can talk a little bit about the changes that will happen. Then then you then you describe it here on the page.

Speaker Change: We've seen we've seen deleveraging in a higher interest rate market for outside the U S, particularly in APAC for several quarters running.

Unknown Executive: You know, we're looking forward and seeing some signs of tapering there. But we continue to see that, as I highlighted, you know, as rates come down, we do expect that that should taper and then start, start to see clients re-leverage. But, so the rate environment is driving some of that. But the other part of it, perhaps the more significant driver, is the financial resource optimization work we're doing that, you know, consequence of that is that loans will roll off our platform, which is one of the points I highlighted in connection with the net new asset report.

Speaker Change: We're looking forward and seeing some signs of tapering there.

But we continue to see that as I highlighted is <unk>.

Speaker Change: Consequently, in addition to increased lending, it's reasonable to expect that lower interest rates will spur increased transactional activity, mandate sales, and investments in alternatives across our wealth business.

Speaker Change: Recurring Net Fee Income increased by 3% to $3.1 billion from higher client balance, Net sales in our UBS Managed Account offerings showed continued momentum, contributing to a sequentially higher recurring net fee margin in the quarter.

Speaker Change: Transaction-based revenues decreased quarter-on-quarter to $1.1 billion, but notably increased around 14% year-on-year on an estimated combined basis, with APAC up around 30% and the Americas up over 20% and broadly flat sequentially versus a strong first quarter. Both regions performed exceptionally well in Structured Products.

Speaker Change: Rates come down we do expect that that should taper and then start we'll start to see clients are re leverage but so the rate environment is driving some of that but the other part of it perhaps the more significant driver is the financial resource optimization work, we're doing that.

Speaker Change: Clients sought customized investment opportunities in an environment of low volatility, high interest, Continued Global Tech Appeal, I would also highlight that our investments in combining GWM and IB markets and solutions capabilities in the Americas are paying off, as evidenced by our transactional revenue performance over the first half of the year, up around 20% versus the same period in 2023.

Speaker Change: Expenses were roughly flat quarter on quarter. Excluding compensation-related effects, underlying operating expenses dropped 2% sequentially, As highlighted earlier, the upcoming client account migration work is expected to be a significant driver of cost reductions in GWM throughout 2025 and into 2026.

Speaker Change: Turning to personal and corporate banking on slide 11.

Todd Tuckner: Thanks, Kim, for the question. So on in terms of the second one, first, the simplification that we talk about is continuing in the UK and the US, but also in other parts of the world to continue merging subsidiaries out of existence to create an unlock for capital funding and tax efficiencies. So that's what we're getting to. So we're working all through that. You know, we just, of course, did the big parent bank and Swiss bank mergers, we reparented the IAC, but now there's still a lot of work that will continue to unlock these benefits.

Speaker Change: PNC delivered a second quarter pre-tax profit of 645 million Swiss francs.

Speaker Change: Revenues were down 4% sequentially, driven by an 8% decline in net interest income that was partly offset with increases in recurring net fees and transaction-based revenues. P&C's NII in the quarter was primarily affected by higher liquidity costs and the S&B's 25 basis point interest rate cut from March as we kept our Swiss clients' deposit pricing unchanged.

Todd Tuckner: So in terms of capital relief naturally to the extent that, and this goes a little bit to the question that was asked earlier in terms of the repatriation of excess capital, say in a subsidiary, of course, that is part of the analysis that we go through as we work through it. But it's, you know, there are contingencies to the timeline in terms of what triggers and what the timing could be to merge some of these entities out of existence.

Speaker Change: In the third quarter, we expect NII to tick down sequentially by a low single-digit percentage, mainly due to the effects of the S&B's second 25-basis point rate cut from late June.

Speaker Change: A consequence of that is that loans will roll off our platform, which was one of the points I highlighted in connection with the.

Speaker Change: In U.S. dollar terms, we expect NII to be roughly flat sequentially.

Speaker Change: Despite these effects, as well as higher costs related to the SMB's move earlier in the quarter to raise minimum reserve requirements, We nevertheless reaffirm our full year 2024 guidance of mid to high single digit percentage decline versus 4Q23 annualized.

Speaker Change: Supported by our Balance Sheet Action. In arriving at this outlook, we are currently pricing in up to two further Swiss franc policy rate reductions of 25 basis points each by the end of 2024.

Speaker Change: Assuming Swiss franc interest rates stabilize next year, as the forward rate curve presently implies, we expect shortly thereafter to see steadying volumes and an inflection point in PNC's net interest income.

Speaker Change: We also expect by then that our balance sheet optimization work will be largely complete with loan pricing reflecting a more appropriate cost of risk across the Swiss credit book. These efforts are necessary to restore returns on capital deployed and net interest margin in our Swiss business.

Speaker Change: Net new asset.

Speaker Change: Pre-Acquisition Level, In this respect, we saw net new lending outflows of 3.4 billion Swiss francs this quarter, driven by repricing of sub-hurdle volume.

Speaker Change: Despite having renewed or granted new loans to our Swiss clients of around 30 billion Swiss francs in 2Q.

Speaker Change: Ah report.

Speaker Change: Transaction based revenues were up 2% mainly from higher credit card, Recurring Net Fee Income Gained 3% on Higher Custody Assets, Together, these non-NII revenue lines, up 2%, demonstrate the business's effectiveness in staying close to clients and minimizing merger disintegration.

Unknown Executive: And Todd, just on sleep, I know that Morgan Stanley has confirmed a 2% rate to be paid. Should we look at similar rates? And could you just also remind us of review on the sweet volumes at the moment? Last summer we saw of a 35% billion? Yeah, what I could say, I mean, is that the number is coming in a little bit, and it's driven is in also some of the comments I made on Mick is driving the 2Q result, so you could assume that number has come a little bit lower. And all I could say, you know, anything further on the rate is that, you know, as mentioned, competitive dynamics, you know, will ultimately feature in how we want, we ultimately settle on a price, on a price for the sweet deposit.

Speaker Change: Credit loss expense was $92 million, driven by a small number of positions in our corporate loan book, as I mentioned earlier. Even with the increased focus on risk-based pricing for maturing loan positions, our Swiss credit portfolio remains of very high quality, with an impaired loan ratio of 1.1%, down sequentially, albeit up versus pre-credit Swiss acquisition.

Speaker Change: With that, let's open for questions.

Speaker Change: And you can talk just on sleep I know that Morgan Stanley has.

Speaker Change: For the foreseeable future, we expect CLE to remain at broadly similar levels given increased book size post-merger, the relative strength of the Swiss franc, and some economic softness in the main Swiss export market. Operating expenses were flat sequentially.

Speaker Change: Similar to GWM, future cost reductions in PNC will be closely tied to the client account and platform migration work for Booking Center Switzerland, planned to commence by the second quarter of 2025.

Speaker Change: On slide 12, pre-tax profit and asset management increased 26% to $228 million. This quarter's results included a gain of $28 million from the initial portion of the sale of our Brazilian real estate fund management.

Speaker Change: In the third quarter, we expect to record an additional $60 million in underlying pre-tax profit on gains from disposals. Mainly from closing the residual portions of this transaction.

Speaker Change: Confirmed 2% range to be paint should we look at similar rates and could you just also remind us of where beyond the sleep.

Speaker Change: Net new money was negative $12 billion. Continued client demand for our SMA offering in the U.S. and positive contribution from our China JVs, only partly compensating outflows across asset classes.

Speaker Change: While our integration efforts to consolidate platforms may constrain AM's net new money performance over the next few quarters, we expect our enhanced global reach and increased scale in alternatives and indexing to at least partially offset these headwinds.

Speaker Change: Net management fees drop 5% as outflows and select active products wait on margin. Performance fees were roughly stable in the quarter.

Speaker Change: During 2Q, AM made strong progress in improving operational efficiency. Key focus area I highlighted during the investor update earlier this year. Operating expenses were 9% lower sequentially on reductions across both non-personnel and personnel costs, partially supported by lower variable compensation. Some of the sequential decline in variable comp is expected to normalize in the third quarter.

Speaker Change: On to our investment banks performance on slide 13, which, as in prior quarters, I compare on a year-over-year basis. The IB delivered a strong second quarter result, with improving capital markets activity supporting an excellent banking quarter.

Speaker Change: Our markets businesses perform well in an environment reflecting mixed market trends.

Speaker Change: In particular, low volatility in equities, rates, and FX, as well as lower cash equity volumes in APAC, where we're overweight.

Speaker Change: Operating profit was $412 million, up from an operating loss of $14 million a year earlier, and up 2% sequentially, as the investment banking backdrop continues to improve.

Speaker Change: Investments to deepen our U.S. presence are having a positive impact on revenue, as our contributions of Credit Suisse talent across key sectors of banking and marketing.

Speaker Change: Volumes at the moment last number we saw was $35 7 billion.

Speaker Change: Underlying revenues grew by 26% to $2.5 billion, with nearly two-thirds of the increase coming from the Americas.

Speaker Change: I would highlight that our revenue growth was achieved with broadly similar levels of RWA as the IB continues to manage within the group RWA limit of 25%, excluding NCL.

Speaker Change: Banking revenues were up 55% as we outperformed global fee pool, both in capital markets and advisory.

Speaker Change: Since the end of 2023, we have gained over a percentage point in market share in each of our strategic banking initiatives, including M&A and Sponsors in the America.

Speaker Change: Regionally, APAC saw revenues nearly double, while the U.S. was up 83%.

Speaker Change: AMIA declined by 3% against a very strong prior period.

Speaker Change: We will now begin the question and answer session for analysts and investors.

Speaker Change: Yeah, what I can say is that the number is.

Speaker Change: Capital Markets revenues were up 82% year-over-year with an outstanding LCM performance reflecting an increase in refinancing activity, mainly in the U.S.

Speaker Change: Advisory Revenues increased by 23% as we leveraged our strong position in APAC to benefit from increased activity and perform well in the Americas.

Speaker Change: The strength of our fully integrated coverage teams is visible in our ability to win new mandates where we rank 7th globally in announced M&A volumes making for an encouraging deal pipeline.

Speaker Change: While we expect to continue capturing market share, macro and geopolitical factors are likely to weigh on continued sequential banking revenue growth in the near term. Revenues and markets reached $1.8 billion, the best second quarter result in over a decade, up 18% year-on-year and driven by the Americas, up nearly 40% Equities revenues were up 17%, driven by both derivatives and cash, where we have seen material gains in market share.

Speaker Change: It would come in a little bit and it's driven.

Speaker Change: FRC was up 20% with broad increases across FX, credit, and rates, benefiting from higher client activity, particularly in FX and rates options.

Speaker Change: Partially Offset by Lower Activity and Spread Compression that Affected Our Rates Flow, Operating expenses rose 12%, predominantly reflecting higher variable compensation linked to improved performance.

Speaker Change: Moving to slide 14.

Speaker Change: As in also some of the comments I made on mix is driving that the two two result, so you could you could assume that number is.

Speaker Change: Noncore and Legacy's pre-tax loss in the quarter was $80 million, supported by around $400 million in revenue.

Speaker Change: Principally from gains on position exits across corporate credit and securitized products and further reductions in the NCL cost base.

Speaker Change: Underlying OPEX was down 37% sequentially, helped by releases and litigation reserves of $172 million. Excluding litigation, operating expenses declined by 17% as we made strong progress driving down personnel costs.

Speaker Change: Third-Party Spend, NCL's six-month pre-tax profit of $117 million, which far exceeds earlier loss expectations.

Speaker Change: Demonstrates the business's skillful management in de-risking its portfolios and rapidly cutting its costs.

Speaker Change: For the second half of the year, we expect an underlying pre-tax loss of around $1 billion, reflecting moderate short-term upsides to revenues and continued sequential progress on cost reduction, albeit at a slower rate than observed over recent quarters.

Speaker Change: Moving to slide 15.

Speaker Change: Over the last four quarters, NCL has made impressive progress, running down its costs across all lines, cutting its underlying operating expense base by over $2 billion, or around 50%.

Speaker Change: NCL has also excelled in running down its balance sheet position. Significantly contributing to group capital efficiency, releasing $5 billion in capital as a result of its efforts. Additionally, NCL has cut its non-operational risk-weighted assets by almost 60% over the last year, including by another $8 billion this quarter, mainly from actively exiting positions across its portfolios, notably in investment-grade and high-yield corporate credit, securitized products, and macro.

Speaker Change: As has come a little bit lower and all I can say you know get anything further on the right is that you know as mentioned competitive dynamics will ultimately feature and how we want we ultimately settle on a on a on a price on a on a price for the sweep deposits. So.

Speaker Change: Similarly, NCL's LRD is down by over 60% since 2Q23, dropping another $40 billion of leverage exposure this quarter, reflecting lower notionals as well as lower levels of HQLA.

Speaker Change: In terms of book closures, NCL shuttered another 10% of its active books in the quarter, bringing the total since last June to around 45%.

Speaker Change: Looking ahead, the progress we're making is visible in the natural roll-off profile, significantly narrowing the gap to our active rundown expectation of around 5% of Group RWA by 2026. Yesterday, we agreed to sell Credit Suisse's U.S. Mortgage Service, This transaction is expected to close in 1Q25, and would reduce RWA by around $1.3 billion, LRD by around $1.7 billion, and annualized costs by around $250,000.

Speaker Change: To summarize, the second quarter demonstrated the power, scale, and secular growth potential of our franchise as we delivered strong underlying profitability and continued to make substantial progress across our integration agenda while reinforcing a balance sheet for all sectors.

Todd Tuckner: In terms of GWM, so, you know, what I, what I could say on the, on the, on the sweep deposits. First of all, advisory is about a third of the total, the total that we have in sweeps. So just to give to dimension that a bit is, I think, that's probably useful to understand. And then as far as, you know, the pricing it goes, of course, the way where we're, first of all, it's a function of interest rates because I mentioned we're going to introduce the new rates and advisory in the fourth quarter because we have to change systems and go through some transitional work to get there.

Unknown Executive: So, you know, as I said, I gave some views on considerations that we, that we will factor in, but as far as an absolute price, you know, that's, that's not at this point something that we have settled on.

Speaker Change: As I said I gave I gave some views on on considerations that we are.

Speaker Change: That the that we will factor in but as far as an absolute price. That's that's not at this point are something that we have settled on.

Speaker Change: Thanks.

Anke Reingen: Next question is from Anke Rangan from RBC; please go ahead. Yeah, thank you very much for taking my question questions. The first one is just on the bars of four impact on the 25 billion and the first of January 25.

Speaker Change: Participants are requested to use only hands while asking a question.

The next question is from <unk> Rangan from RBC. Please go ahead.

Speaker Change: Anyone who has a question may press star and 1 at this time.

<unk> Rangan: The first question is from Giulia Aurora Miotto from Morgan Stanley.

<unk> Rangan: Yes. Thank you very much for taking my question. The first one is just on the floor.

The impact of the <unk>.

Dan: Hey, Dan.

Dan: 25.

Unknown Executive: I guess you said you will give us a bit more detail potentially before year end, but I mean, you previously talked about a 15 billion net of, yeah, no core rundown. The other, can you give us a better indication of how the 25 billion will actually look on on the first of January 2025. And then, so coming back on the NII guidance, just confirming the, the PNC reiterating of guidance that's on the US dot basis rather than search rank. And, and just conceptually, I mean, let's see, I mean, you now assume more rate cuts than before, but the guidance is reiterated.

Speaker Change #100: I guess, you said you would give us a bit more detail.

Speaker Change #100: Potentially before year end.

Todd Tuckner: So, so we have to see also where interest rates are, so in terms of an absolute price that I can offer. But what I can say is that we will for sure price in the value of the insurance coverage we offer on deposits that benefit from multiple programs, multiple bank programs and reciprocal programs that we've invested in. And that will feature into, into the, into the price of the rate we ultimately offer.

Speaker Change #101: Please go ahead.

Speaker Change #101: And then you previously talked a biologist 15 billion.

Speaker Change #102: Oh, Yeah noncore rundown.

Speaker Change #103: Do you have can you give us a better indication of all the 25 billion would actually look on on the first of January 2025.

Speaker Change #102: And then coming.

Speaker Change #102: Coming back on the NII guide.

Speaker Change #104: Just confirming the the P&C.

Speaker Change #105: Let me try teahouse guidance that's.

On the U S.

Speaker Change #105: Rather than.

Todd Tuckner: In terms of lending balances, XUS, the main driver of that, I mean, you know, clearly, we've seen, we've seen de-leveraging in a higher interest rate market for outside the US, particularly an APAC for several quarters running. You know, we're, we're looking forward and seeing some signs of tapering there. But we continue to see that as I highlighted, you know, as rates come down, we do expect that that should taper and then start, start to see clients re-laverage.

Speaker Change #105: And just conceptually.

And then you receive more.

Speaker Change #105: More rate cuts.

Speaker Change #105: For the guidance as we iterate.

Unknown Executive: Can you just maybe highlight what the missing pieces that allows you to reiterate guidance? Thank you very much. Thanks, thank you. So on a Basel 3 final, you know, we still expect 25 billion impact is 5% of a risk weighted assets. So, in that, in that range. As you mentioned, we guided in the fourth quarter in our investor update that 15 billions in the core 10 billions and non core. I think for now that split remains pretty robust in terms of how we're thinking, how we're seeing it. And, and actually will continue to work down the NCL portfolio to make that impact lessened over time.

Speaker Change #106: Can you just maybe highlight what the missing pieces that allows you to reiterate guidance. Thank you very much.

Speaker Change #107: Yeah. Thanks, Alex So on Basel three final as mentioned, we still expect 25 billion impact is 5% of our risk weighted assets. So in that in that range.

Todd Tuckner: But so the rate environment is driving some of that. But the other part of it, perhaps the more significant driver, is the financial resource optimization work we're doing that, you know, consequence of that is that loans will roll off our platform, which is one of the points I highlighted in connection with the net new asset report.

Speaker Change #108: As you mentioned, we guided in the fourth quarter in our Investor update that 15 billions in the core 10 billions of noncore I think for now that split remains pretty robust in terms of how we're thinking how we're seeing it in.

Speaker Change #108: And naturally we will continue to work down the NCL portfolio to make that impact lessened over over time.

Kian Abouhossein: And Todd, just on sleep, I know that Morgan Stanley has confirmed 2% rate to be paid. Should we look at similar rates? And could you just also remind us of review on the sweet volumes at the moment last summer we saw of a 35% billion? Yeah, what I could say, I mean, is that the number is coming in a little bit and it's driven is in also some of the comments I made on Mick is driving the 2Q result, so you could assume that number has come a little bit lower.

Unknown Executive: In terms of the NII guidance for PNC, just through, you know, you asked for clarity on it isn't, it isn't Swiss ranks or guiding in Swiss ranks will offer, you know, both in the future to sort of help. As I mentioned in 3Q, we see low, a low single digit down in Swissi, but flat sequentially in USD. And as I mentioned, you know, I think that's a good outcome that we've had a number of headwinds that we've been working through. So, to reaffirm the guidance for the full year is also a function of some management actions that have been taken, including some loan repricing actions that have helped.

In terms of the NII guidance for P&C just to you know you asked for.

Speaker Change #108: Clarity on it isn't it isn't Swiss franc. So we're guiding and are in Swiss francs. We'll offer you know both in the future to sort of help as I mentioned.

Speaker Change #109: In <unk>, we see low.

Speaker Change #109: A low single digit down in Swissie, but flat sequentially and in U S D.

Speaker Change #109: And as I mentioned, you know I think that's a good outcome that.

Speaker Change #109: We've had a number of headwinds that we've been working through sort of reaffirmed the guidance for the full year is also a function of some management actions that have been taken including.

Kian Abouhossein: And all I could say, you know, anything further on the rate is that, you know, as mentioned, competitive dynamics, you know, will ultimately feature in how we want, we ultimately settle on a price, on a price for the sweet deposit. So, you know, as I said, I gave some views on considerations that we, that we will factor in, but as far as an absolute price, you know, that's, that's not at this point, something that we have settled on.

Speaker Change #109: Some loan repricing actions.

Speaker Change #109: That have helped so.

Unknown Executive: So those are the drivers of the NII guidance for PNC.

Speaker Change #109: Those are the drivers of the NII guidance for P&C.

Unknown Executive: So I just to follow up, so on the 1st of January 25th, I mean the 5% increase in RWA, or should it be lower because some litigation NCL is on down? It's already kicked in or reduced the impact? No, the estimate is on the same basis we gave it in 4Q in terms of the impact because it's mainly FR-TV driven. So for now, assume the guidance remains.

Speaker Change #110: Sorry, just a follow ups on the first of January 25, 25, 5% increase in auto leeway or should it be lower.

Speaker Change #110: Because some mitigation on donlin.

Anke Reingen: Next question is from Anke Rangan from RBC, please go ahead. Yeah, thank you very much for taking my question questions. The first one is just on the bars of four impact on the 25 billion and the first of January 25.

Speaker Change #112: Already kicked in or reduce the impact.

Speaker Change #112: There are the the the estimate is on the same basis, we gave it in <unk> in terms of the impact because it's mainly F. R. T V driven so.

Speaker Change #112: For now assume the guidance remains.

Anke Reingen: I guess you said you will give us a bit more detail potentially before year end, but I mean, you previously talked about a 15 billion net of, yeah, no core rundown, the other, can you give us a better indication of how the 25 billion will actually look on on the first of January 2025. And then, so coming back on the NII guidance, just confirming the, the PNC reiterating of guidance that's on the US dot basis rather than search rank. And, and just conceptually, I mean, let's see, I mean, you now assume more rate cuts than before, but the guidance is reiterated.

Unknown Executive: And, as I said, if we have an update before we go live with it, of course we'll come back and provide it. Okay, thank you very much.

Speaker Change #112: And as I said, if we have an update before we.

Speaker Change #112: We go live with and of course will come back and and provided.

Speaker Change #113: Okay. Thank you very much.

Speaker Change #113: Okay.

Chris Hallam: The next question is from Chris Hallam from Goldman Sachs. Please go ahead. Yeah, good morning, and thanks for taking my questions. So first you've got this banking to generate almost twice the baseline revenues by 2026, assuming supportive markets. So obviously performance was very strong in the 2nd quarter, but then we took this period of elevated volatility at the start of August. Has that changed anything in terms of how close we are now for supportive markets? And how would you expect the recovery to progress through the 2nd half of this year?

Speaker Change #114: The next question is from Craig Hallum from Goldman Sachs. Please go ahead.

Speaker Change #115: Hi, good morning.

Speaker Change #115: Good morning, and thanks for taking my questions. So first you've got to sort of banking to generate almost twice the baseline revenues by 2026, assuming supportive markets.

Speaker Change #116: Obviously performance was very strong in the second quarter, but then we've had this period of elevated volatility in the stock of August has that changed anything in terms of how close you announce a supportive market and how would you expect the recovery to progress through the second half of this year.

Unknown Executive: And then 2nd question, just on profitability. At the start of the year, you said you'd expect to get to around 45% of the 13 billion growth savings by the end of 24, and you've got there by the end of the 1st half. And you also guided from mid single digit underlying return on court to 1 for this year, mid to high for next year. Consensus is at 6% for this year, 9% for next year. But in the 1st half, you're already above 9. So how should we be thinking now about the path on the underlying return on court to 1 through 2024 and 2025?

Speaker Change #117: And then second question just on profitability at the start of the year.

Anke Reingen: Can you just maybe highlight what the missing pieces that allows you to reiterate guidance? Thank you very much. Thanks, thank you. So on a Basel 3 final, you know, as mentioned, we still expect 25 billion impact is 5% of a risk weighted assets. So in that, in that range. As you mentioned, we guided in the fourth quarter in our investor update that 15 billions in the core 10 billions and non core, I think for now that split remains pretty robust in terms of how we're thinking, how we're seeing it.

Speaker Change #118: You said you'd expect to get to around 45% of the $13 billion gross savings by the end of 'twenty four and you've got now by the end of the first half.

Speaker Change #119: Also guided for mid single digit underlying return on core tier one for this year mid to high for next year consensus is at 6%.

Speaker Change #119: For this year and 9% for next year, but in the <unk>.

Speaker Change #120: First off you're already above nine.

Speaker Change #121: So how should we be thinking now about the path. The line return on core tier one through 2024 and 2025.

Unknown Executive: So thank you, Chris. I'll take the first question. So you know, I think, of course, the market environment is quite volatile, and there are elements of fragility that we see. But you know, what is most important for us is to look through the short term market dynamics, and you know, I can tell you that I'm very confident that we are building up a very compelling pipeline in terms of mandate that we win, still not announced, and things that can be then executed in a normalized market environment. So, of course, if we see the kind of volatility we add in a couple of weeks ago, that would not be very helpful for the pipeline.

Speaker Change #122: Thank you for taking my questions.

Speaker Change #122: Thank you Chris I'll take the first question so.

Speaker Change #123: Look you know I think of course the market environment is is that it.

Anke Reingen: And, and actually will continue to work down the NCL portfolio to make that impact lessened over over time. In terms of the NII guidance for PNC, just through, you know, you asked for clarity on it isn't, it isn't Swiss ranks or guiding in Swiss ranks will offer, you know, both in the future to sort of help. As I mentioned in 3Q, we see low, a low single digit down in swissi, but flat sequentially in in USD.

It's quite a volatile end and then there are elements of agility that we see but you know.

Speaker Change #123: What is most important for US is is to look through.

Speaker Change #123: The short term market dynamics and that I can tell you that I'm very confident that we are building up a very compelling pipeline in terms of mandate that we will still not announced.

Speaker Change #123: And things that can be then executed in a normalized market environment. So.

Of course, if we see the kind of.

Speaker Change #123: Volatility, we adding that a couple of weeks ago that would not be very helpful.

Anke Reingen: And as I mentioned, you know, I think that's a good outcome that we've had a number of headwinds that we've been working through so to reaffirm the guidance for the full year is also a function of some management actions that have been taken, including some loan repricing actions that have helped. So those are the drivers of the NII guidance for PNC.

Speaker Change #123: For the pipeline, but in general.

Unknown Executive: But in general, I stay, you know, I would say that positive in respect of our momentum. So, okay, good pipeline and good, good momentum in winning mandates, but of course it will also depend on market conditions.

Speaker Change #123: Ste.

Speaker Change #123: I would say that positive that in respect of.

Speaker Change #123: Our momentum so.

Speaker Change #124: Hey, good pipeline and good.

Speaker Change #124: Good momentum in winning mandates but.

Speaker Change #125: Of course, it will also depend on market conditions.

Anke Reingen: So I just to follow up, so on the 1st of January 25th, I mean the 5% increase in RWA, or should it be lower because some litigation NCL is on down? It's already kicked in or reduced the impact? No, the estimate is on the same basis we gave it in 4Q in terms of the impact because it's mainly FR-TV driven. So for now, assume the guidance remains. And as I said, if we have an update before we go live with it, of course we'll come back and provide it. Okay, thank you very much.

Unknown Executive: Chris, hi on the second in terms of a return on court to your one and out relates to our guidance. So, you know, as you mentioned, we initially guided it mid for mid single digits for 24 and mid to high for 25. So naturally, if there's an update, we'll bring it to you when we talk about our 25 expectations later this year. In terms of where we are, you know, as Sergio highlighted in his comments, the first six months, we generated an underlying return on CT1 of 9.2%. So obviously, we're comfortably ahead of the target of mid for 2024.

Speaker Change #125: And Chris on the second in terms of a return on core tier one and.

Speaker Change #125: I'll ask two, please.

Speaker Change #126: And how it relates to our guidance.

Speaker Change #126: So my first one, thank you very much for the guidance on NII in GWM, which was, something on the market was looking forward to.

Chris: So as you as you mentioned, we initially guided at a mid four mid single digits for 'twenty, four and mid to high for 25, some naturally if there's.

Chris: An update will bring it to you when we talk about a <unk>.

Chris: Twenty-five expectations later this year.

Chris: In terms of where we are as Sergio highlighted in his comments our first six months, we generated an underlying return on CET one of nine 2%. So obviously, we're comfortably ahead of our of the target of mid for 2024.

Chris Hallam: The next question is from Chris Hallam from Goldman Sachs, please go ahead. Yeah, good morning and thanks for taking my questions. So first you've got this banking to generate almost twice the baseline revenues by 2026, assuming supportive markets. So obviously performance was very strong in the 2nd quarter, but then we took this period of elevated volatility at the start of August. Has that changed anything in terms of how close we are now for supportive markets?

Chris: Yeah.

Amit Goel: The next question is from Amit Goel from Mediovanca. Please go ahead. Hi, thank you. Thanks for taking my questions. So one just to follow up just to make sure I also heard some of the previous guidance correctly. I think you mentioned the cost of the reprise on sweep to be about $50 million annually. So I mean, I guess given the one third advisory disclosure, that would imply only just over 40 bits of incremental cost on that portion and effectively nothing on the rest. So, I mean, I was just curious. I mean, in a way that you could continue to see outflow.

Chris: Can I just ask a clarification?

Chris: The next question is from Amit <unk> from Mediobanca. Please go ahead.

Amit: And if you look at the current forward curve, when do you expect NII to bottom exactly?

Amit: Alright, Thank you and thanks for taking my.

Amit: Do you think second half 24 and then we can grow or possibly first half 25?

Amit: Questions.

Amit: So one just a follow up just to make sure I understand some of the previous guidance correctly and I think you mentioned and the cost of the repricing suite and to be about $50 million annually.

Chris Hallam: And how would you expect the recovery to progress through the 2nd half of this year? And then 2nd question, just on profitability. At the start of the year, you said you'd expect to get to around 45% of the 13 billion growth savings by the end of 24 and you've got there by the end of the 1st half. And you also guided from mid single digit underlying return on court to 1 for this year, mid to high for next year. Consensus is at 6% for this year, 9% for next year. But in the 1st half, you're already above 9.

Speaker Change #129: So I mean, I guess given the ones that are advisory dysplasia that would imply and just generally the 40 bips of incremental cost on that portion and effectively nothing on the rest.

Speaker Change #129: And so I mean.

Speaker Change #129: I was just kind of curious I mean.

Todd Tuckner: So how should we be thinking now about the path on the underlying return on court to 1 through 2024 and 2025? So thank you Chris.

In a way then you could continue to see outside so I'm wondering what the capacity is to the grade to replace that funding similar cost.

Unknown Executive: So I'm wondering if the capacity is for the group to replace that funding at similar cost. And then also just link to that, if I look then at the total sweep and the cost of sweep, it seems like the earnings are pretty similar to what management America generates.

Speaker Change #130: And then I will say just linked to that and if I look then at the tasteful sleep in the Costa fleet. It seems like the earnings are pretty similar to what wealth management Americas generates.

Sergio Ermotti: I'll take the first question. So you know, I think of course the market environment is it's quite volatile and there are elements of fragility that we see. But you know, what is most important for us is to look through the short term market dynamics and you know, I can tell you that I'm very confident that we are building up a very compelling pipeline in terms of mandate that we win still not announced and things that can be then executed in a normalized market environment.

Sergio Ermotti: So of course, if we see the kind of volatility we add in a couple of weeks ago, that would not be very helpful for the pipeline. But in general, I stay, you know, I would say that positive in respect of our momentum. So, okay, good pipeline and good, good momentum in winning mandates, but of course it will also depend on market conditions.

Unknown Executive: So I'm just kind of all secured how, how you think about what management America's profitability and with some of these headwinds, how you think you'll get back to that mid teams operating margin.

So I'm just kind of Elisa kit how.

Speaker Change #131: And how do you think about wealth management Americas profitability and with some of these headwinds how do you think you'll get back to that mid teens operating margin.

Unknown Executive: And then secondly, just curious on the parent, you know, is there any scope to shift exposure from foreign participation to domestic in addition to capital repatriation and you know whether that can be reflected in participation values. You know, if his potential will change coming. Thank you. Thanks, Ahmed. Yeah, in terms of the second one, shifting exposure domestically, you know, whether that helps. It's way too early to speculate on how we're going to address and what actions we take. We don't know what the standards are. So, and where they'll move me and where the standards will move, assuming they move.

Speaker Change #130: And.

Speaker Change #132: And then secondly, and just.

Speaker Change #133: I'm curious on the on the parent.

Speaker Change #134: Is there any scope to shift exposure from foreign.

Speaker Change #135: Participations to domestic and in addition to capital repatriation.

Speaker Change #135: That can be reflected in participation bodies.

Speaker Change #135: Yeah.

Speaker Change #137: Is it potentially will change coming.

Speaker Change #137: Thanks, Amit Ah Yeah in terms of the second one shifting exposure domestically.

Speaker Change #138: You know whether that helps its way too early to speculate on how we're going to address and what actions. We take we don't know what the standards are so and where they'll they'll move me aware of the standards will move assuming they move in so to speculate about what mitigating actions are might be available to us is way too.

Todd Tuckner: Chris, hi on the second in terms of a return on court to your one and out relates to our guidance. So, you know, as you mentioned, we initially guided it mid for mid single digits for 24 and mid to high for 25. So naturally, if there's an update, we'll bring it to you when we talk about our 25 expectations later this year. In terms of where we are, you know, as Sergio highlighted in his comments, the first six months, we generated an underlying return on CT1 of 9.2%. So obviously, we're comfortably ahead of the target of mid for 2024.

Unknown Executive: And so to speculate about what mitigating actions might be available to us is way too early. In terms of sweeps, yeah, I disclose that the impact on pre-tax profit is expected to be around 50 million annualized in the US wealth business. You know, I did say that that's net of offsetting factors. So this includes an array of banking initiatives and expense programs across various categories. So, you know, I wouldn't I wouldn't take the 50 as gross income, but actually, as I said, it is, it is a net impact. And I think, look, you know, I saw interesting that you asked the question, and then, you know, lead to how we're going to address, you know, the pre-tax margin issues.

Speaker Change #137: Early.

Speaker Change #139: In terms of sweeps, yes, I disclosed that the impact on on pre tax profit is is expected to be around.

Speaker Change #139: Around 50 million annualized in in the U S wealth business.

Speaker Change #139: You know I did say that that's a.

Speaker Change #139: Net of offsetting factors. So that includes an array of banking initiatives and expense programs across various categories. So there.

Speaker Change #139: I wouldn't I wouldn't take the 50 as gross income, but actually as I said.

Speaker Change #139: It is a it is a net impact and I think look you know you know I saw.

Interesting that you asked the question and then lead to how where we're going to address.

Speaker Change #139: The pre tax margin issues.

Unknown Executive: You know, we, nothing has changed on that where, you know, we were focused on that. We know we have to do the sweep deposit issue; you know, is a modest hit on that, of course, because it's something we're saying is adverse to PBT. We think it's manageable. And now we're getting on with the work of improving the margins on the basis of how we've described that in the past. So we know we have to do there, and we're taking steps to achieve that.

Speaker Change #139: Nothing has changed on that where we were focused on that we know we have to do.

The sweep deposit issue is.

Speaker Change #139: Is a modest hit on that of course, because it's it's something we're saying is is adverse to PBT. We think it's manageable and now we're getting on with the work of of of improving the margins on the basis of how we describe that in the past. So we know we have to do there and.

Speaker Change #139: And we're taking steps to to achieve that.

Amit Goel: So I mean, I was just curious, I mean in a way that you could continue to see outflow. So I'm wondering what the capacity is for the group to replace that funding at similar cost. And then also just link to that, if I look then at the total sweep and the cost of sweep, it seems like the earnings are pretty similar to what what management America generates.

Speaker Change #139: Yeah.

Benjamin Goy: The next question is from Benjamin Goy from Deutsche Bank, please go ahead. Yes, I don't want any M2 question, please, but the first one on GWM in particular, Mary Tass, because income ratio remains above 90 percent then, it was better during low interest rate of time, so just wondering with the mixed shift from NRI, or an eye calling mark, or two, most likely, as you see, upside through the end of 2006, because income ratio and improvement target, and then, secondly, on the capital side, you know, because you have to group, you guys have a 14 percent CT bond, but you see in the 12 and a half more, the binding constraint, and at the first half of the question, the second is with Switzerland being essentially only geographic, geographic, introducing FRTB and Mk.

Speaker Change #139: So that's the first question.

Speaker Change #139: The next question is from Benjamin Goy from Deutsche Bank. Please go ahead.

Benjamin Goy: And then the second question is instead on the capital of the parent.

Benjamin Goy: Yeah, Hi, good morning, two questions. Please.

Speaker Change #141: And in particular, CSI seems to have a lot of excess capital and upstreaming that could reduce the potential impact from the proposal in Switzerland.

Speaker Change #141: One on Gws and they kept many times already.

Amit Goel: So I'm just kind of all secured how, how you think about what management America's profitability and with some of these headwinds, how you think you'll get back to that mid teams operating margin.

Speaker Change #142: Income ratio remains above 90%.

It was better during.

Speaker Change #143: Low interest rate and time, so just wondering with the mix shift from an I O and I am calling micro achieved most likely you'd see.

Todd Tuckner: And then secondly, just curious on the parent, you know, is there any scope to shift exposure from foreign participation to domestic in addition to capital repatriation and you know whether that can be reflected in participation values. You know, if his potentially will change coming. Thank you. Thanks, Ahmed. Yeah, in terms of the second one, shifting exposure domestically, you know, whether that helps. It's way too early to speculate on how we're going to address and what actions we take.

Speaker Change #144: I forget.

Speaker Change #145: Thank you.

Speaker Change #146: Cost income ratio.

Speaker Change #146: <unk> targets.

Speaker Change #146: And can we expect UBS to upstream some of that capital or how are you thinking about excess capital at the subsidiaries?

Speaker Change #146: And then separately on the capital quite busy as a.

Speaker Change #146: Guy at April 14th N P T Barnum, but you've seen the 12 and have more of a binding constraint and.

Speaker Change #146: Thank you.

Speaker Change #147: So regarding the NII guidance, in terms of the implied forward curve, so as I mentioned, we ended up pricing in, as you saw, I modeled four 25 basis point rate cuts through the end of the year.

Speaker Change #147: The first half of the question.

Speaker Change #147: If you look out, in terms of when the implied forward curve would suggest bottoming out, probably pricing in more like seven.

Speaker Change #147: Depending on what you're looking at, so, you know, I mean, from here, while difficult to speculate, it could be sometime in mid-2025.

Speaker Change #147: We've been Switzerland.

Speaker Change #148: But I spend time, what I think is really important to recognize is that, you know, in a lower NII, lower interest rate environment, there are significant offsets and tailwinds in the business that we expect to see, and that was a point that we wanted to, you know, really ensure is well understood, because ultimately, transaction revenues, re-leveraging and driving up NII from re-leveraging, and also, you know, recurring fees from mandate sales, you know, all have upside in an environment of lower interest rates.

Speaker Change #148: Youre welcome.

Speaker Change #147: Youre welcome.

Speaker Change #147:

Speaker Change #147: In terms of the parent bank capital, you mentioned Credit Suisse's UK subsidiary that has excess capital.

Speaker Change #147: Introducing her to be a multi lane will do you think that the final.

Speaker Change #147: Of course, we're working on restructuring on all of our subsidiaries where we can, and ultimately, we will, as appropriate, upstream the capital in any of the subsidiaries in order to alleviate the capital at the parent bank.

Unknown Executive: Lay, and do you think that's the final piece of the target in terms of higher capital requirements for you? Thank you. Let me take the second part of the questions. Of course, you know, with the 14 percent guidance we have right now, as it is, the 12.5 percent you mentioned is looked through fully applied 2030 current requirements. We will see exactly how things developed in the next few quarters in terms of future requirements. From FRTB standpoint to view, of course, Switzerland will introduce that, on January 1st, it will be a short term, a competitive disadvantage. We don't believe it's un, we believe it's manageable. Short term, of course, if this should other jurisdictions not converge, not to converge to buzz a truthful implementation over the next couple of years, then, of course, that would be a little bit more problematic, and we would need to think about how to address this matter.

Pete that's a positive in terms of higher capital requirement.

Speaker Change #149: Thank you.

Speaker Change #150: Let me take the second part of the questions of course.

Todd Tuckner: We don't know what the standards are. So and where they'll move me and where the standards will move, assuming they move. And so to speculate about what mitigating actions might be available to us is way too early. In terms of sweeps, yeah, I disclose that the impact on on pre tax profit is expected to be around 50 million annualized in the US wealth business. You know, I did say that that's net of offsetting factors.

Speaker Change #151: Uh huh.

Speaker Change #152: The 14% guidance, we have right now is stays as it is at the 12, 5% you mentioned these at look through fully apply 2030 at current requirements that we will see exactly how things developed.

Todd Tuckner: So that includes an array of banking initiatives and expense programs across various categories. So, you know, I wouldn't I wouldn't take the 50 as gross income, but actually, as I said, it is, it is a net impact. And I think look, you know, you know, I saw interesting that you asked the question and then, you know, lead to how we're going to address, you know, the pre tax margin issues. You know, we, nothing has changed on that where, you know, we were focused on that.

Speaker Change #151: And the next.

Few quarters in terms of future requirements from Fr <unk> standpoint of view of course, as you mentioned, Switzerland, we introduce that on January 1st.

Speaker Change #153: It will be a.

Speaker Change #153: Short term a competitive disadvantage, we don't believe its a.

Speaker Change #154: We believe is manageable short term of course it is.

Speaker Change #155: Should other jurisdictions not converge not to corner.

Speaker Change #155: Converge to Basel III fully implementation that over the next couple of years, then of course that will be it'll be more problematic and we would need to think about how to address it is not there. So we remain confident that sat.

Unknown Executive: So, we remain confident that we will be able to have a level playing field in how we operate and compete globally, but it remains to be seen. And Benjamin, here's how we think about your cost income ratio question for GWM, where we have a look through cost income ratio of presently of around 80 percent. Naturally, when we plan the 13 billion of gross cost sales and the less than 70 percent cost income ratio, GWM factors in quite prominently in that piece of work, and that's why I've highlighted that the cost income ratio will be benefited by the work that's just going to get going in the next quarter or two, which is the client account migration work and platform consolidation, starting in APAC in parts of Europe before the Swiss Booking Center.

Speaker Change #155: We will be able to have a level playing field in how we operate and compete globally, but it.

Speaker Change #156: It remains to be seen.

Speaker Change #156: And Benjamin and here's how we think about the your your your cost income ratio question for Gws.

Todd Tuckner: We know we have to do the sweep deposit issue, you know, is a modest hit on that, of course, because it's something we're saying is is adverse to PBT. We think it's manageable. And now we're getting on with the work of improving the margins on the basis of how we've described that in the past. So we know we have to do there and we're taking steps to achieve that.

Speaker Change #157: We have a look through cost to income ratio presently of around 80% you know naturally when we plan the $13 billion of gross cost saves.

Benjamin Goy: And the less than 70% cost to income ratio Gws factors in.

Benjamin Goy: Quite prominently in that are in that piece of work and that's why you know I've highlighted that.

Benjamin Goy: The cost income ratio will be benefited benefited by the work that just going to get going in the next quarter or two which is the client account migration work and platform consolidation starting in and in APAC in parts of Europe before the Swiss booking center that will do.

Benjamin Goy: The next question is from Benjamin Goy from Deutsche Bank, please go ahead Yes, I don't want any M2 question, please, but the first one on GWM in particular, Mary Tass, because income ratio remains above 90 percent then, it was better during low interest rate of time, so just wondering with the mixed shift from NRI, or an eye calling mark, or two, most likely, as you see, upside through the end of 2006, because income ratio and improvement target, and then, secondly, on the capital side, you know, because you have to group, you guys have a 14 percent CT bond, but you see in the 12 and a half more, the binding constraint, and at the first half of the question, the second is with Switzerland being essentially only geographic, geographic, introducing FRTB and Mk. Lay, and do you think that's the final piece of the target in terms of higher capital requirements for you?

Unknown Executive: That will drive significant costs down and ultimately, which is why I believe that wealth and PNC will benefit significantly in the latter half of the integration work. So, in terms of where we get our cost income ratio, GWM's cost income ratio in the end will be a big contributor to the group meeting its target of less than 70 percent by the end of 2026. Thanks, Vincent.

Benjamin Goy: Drive significant cost down and ultimately you know.

Benjamin Goy: Which is why I believe that our wealth and P&C will benefit significantly in the latter half of the integration work.

Benjamin Goy: So in term in terms of where we get our cost income ratio. It will gws cost income ratio in the end will be a big contributor to the group.

Benjamin Goy: Meeting its target of less than 70% by the end of 2026.

Benjamin Goy: Great.

Unknown Executive: In particular on the America, so do you have America, so you probably won't see much of a cost that benefits that greatly, I'm wrong. Question was on the America, sorry, didn't you? Yeah, indeed from the 90, from the 90% right now, more towards the 85% we can accelerate with the different revenue weeks. No, as I said also to the before, and I've said previous obviously we're working towards the mid teens, profit margin over the next couple of years. That's where, we know we have to narrow the gap where we are. That's where we are working towards, and that also features into the less than 70% cost income ratio by the end of 26, getting to that level.

Speaker Change #158: In particular on the America for GW in America, So you probably won't be much of a.

Speaker Change #159: This benefit is that correct me if I'm wrong.

Speaker Change #160: Question was on the Americas, sorry, I didn't.

Michael: From the 19, 90% right now Michael.

Speaker Change #162: Was it accelerated with the different revenue mix.

Benjamin Goy: Thank you. Let me take the second part of the questions, of course, you know, with the 14 percent guidance we have right now, as it is, the 12.5 percent you mentioned, is looked through fully applied 2030 current requirements, we will see exactly how things developed in the next few quarters in terms of future requirements. From FRTB standpoint to view, of course, as you mentioned, Switzerland will introduce that, on January 1st, it will be a short term, a competitive disadvantage, we don't believe it's un, we believe it's manageable, short term, of course, if this should other jurisdictions not converge, not to converge to buzz a truthful implementation over the next couple of years, then, of course, that would be a little bit more problematic, and we would need to think about how to address this matter.

Speaker Change #162: No.

Speaker Change #163: But look as as I said also to the before and I've said previously we're working towards a mid teens profit margin over the next couple of years, that's where we know we have to narrow the gap, where we are that's where we are working towards and that also features into the.

Speaker Change #163: As you know the less than 70% cost income ratio by the end of 'twenty six getting to.

Speaker Change #163: To that level, so you know.

Unknown Executive: So, you know, nothing that I've guided to today has changed any of that. We're very focused on taking the steps to achieve that by that in that time frame.

Speaker Change #163: Nothing that I've guided to today has changed any of that.

Speaker Change #163: We're very focused on on on taking the steps to achieve that by that in that time frame.

Speaker Change #163: Okay.

Khaled: The next question is from Khaled from KBW. Please go ahead. Hi, thanks to take my questions. I'm just what do you assume in terms of loan and deposit grace in the Swiss business, NII guys and your GWM guys in the second half of the year? And then secondly, how do you see deposit mixed shifts and deposit beaters evolving within that, guys, as well?

Speaker Change #164: The next question is from <unk> from <unk>. Please go ahead.

Speaker Change #165: Thank you.

Speaker Change #165: Hi, Thanks for taking my questions and.

Speaker Change #166: The next question is from Andrew Coombs from CT.

Speaker Change #166: Okay, well, what do you assume in terms of line in public right.

Speaker Change #167: NII Guide Andrew PWM guidance in the second half of the year and then secondly, how do you see deposit mix shift.

Speaker Change #168: On the VITAS evolving within that guide as well thank you.

Unknown Executive: Thank you. Yeah, thanks, Tom. So, in terms of volumes in each of the businesses, you know, I expect loans in both of the businesses through the end of 2024 to come slightly in, largely because of the balance sheet work that I highlighted in my comments. So, I think in both cases, loans would come in. I see deposits as well through the GWM side as well towards the end of the year. I mean, roughly flat at this point. I see PNC growing deposits, whether, you know, through the rest of this year, but certainly as we look out over the longer term.

Benjamin Goy: So, we remain confident that we will be able to have a level playing field in how we operate and compete globally, but it remains to be seen. And Benjamin, here's how we think about your cost income ratio question for GWM, where we have a look through cost income ratio of presently of around 80 percent, naturally when we plan the 13 billion of gross cost sales and the less than 70 percent cost income ratio, GWM factors in quite prominently in that piece of work, and that's why I've highlighted that the cost income ratio will be benefited by the work that's just going to get going in the next quarter or two, which is the client account migration work and platform consolidation, starting in APAC in parts of Europe before the Swiss Booking Center.

Speaker Change #169: Please go ahead.

Speaker Change #169: Yeah. Thanks, Tom So in terms of in terms of volumes and each of the businesses I expect loans.

Speaker Change #169: Good morning.

Speaker Change #169: In both of the businesses through the end of 'twenty 'twenty four to come slightly in largely because of the.

Speaker Change #169: I'd like to just drill down into two of the areas where you've perhaps delivered ahead of expectation. So firstly, on the non-core, another successful quarter of actively reducing the RWA, some further gains on some of those position exits.

Speaker Change #169: You're now talking about narrowing that gap to the natural runoff. So based on the natural runoff, you'd be at 6%.

Speaker Change #169: The balance sheet work that that I highlighted in my comments, so I think and in both cases loans would come in I see deposits are.

Speaker Change #169: As well through.

Speaker Change #169: On the gws side as well.

Speaker Change #169: Towards the end of the year I mean roughly flat.

Speaker Change #169: At this point I see a P&C.

Speaker Change #169: You're aiming for 5%.

Speaker Change #169: Growing deposits.

Speaker Change #169: So I think that there's only another 5 billion inside of active RWA management in that business.

Speaker Change #169: And as you alluded to, the close of the...

Speaker Change #169: Weather.

Speaker Change #169: The US mortgage servicing business will get in some way towards that.

Speaker Change #169: Through the rest of this year, but certainly as we look out.

Speaker Change #169: So should we assume that the active management within the NCL book is now largely complete or will be largely complete by the end of this year?

Speaker Change #170: Over the longer term, so I would say a little bit of.

Unknown Executive: So, I would say a little bit of downward pressure in terms of loans and large parts is given the balance sheet work that we're doing on the deposit side. I see more sort of flat to growing in the near to midterm in terms of the balance sheet. In terms of deposit mixed shifts, look, I think in the end where, you know, we've been seeing as many banks have the effects of deposit mix and cash sorting and rotation for some period of time, you know, as rates start to come down. We expect that the cash sorting will, you know, continue to taper and will be less of an impact in terms of the NII.

Speaker Change #170: And then my second question is just on costs.

Speaker Change #170: Previously, I think you expected to be at 50% by N24. You're now at 55% guiding by N24 of the total cost save target. That's an extra 500 million of cost saves you've realised earlier than expected.

Speaker Change #170: Which divisions is it that those cost saves are coming through earlier than expected?

Speaker Change #170: And in your mind, is it purely just a timing issue that comes through earlier as opposed to a quantum issue that you're delivering more cost saves than expected?

Speaker Change #170: Downward pressure in terms of loans in large part just given the balance sheet work that we're doing on the deposit side I see more of a sort of flat to growing in the in the near to midterm in terms of the balance sheet in terms of.

Benjamin Goy: That will drive significant costs down and ultimately, which is why I believe that wealth and PNC will benefit significantly in the latter half of the integration work. So, in terms of where we get our cost income ratio, GWM's cost income ratio in the end will be a big contributor to the group meeting its target of less than 70 percent by the end of 2026. Thanks, Vincent.

Speaker Change #170: Deposit mix shifts look I think in the end, where we've been seeing as many banks have the effects of deposit mix and the cash sorting and rotation for some period of time.

Speaker Change #170: As rates start to.

Speaker Change #170: <unk> come down.

Speaker Change #170: We expect that the cash sorting will continue to taper and it'll be less of an impact in terms of the NII and.

Benjamin Goy: In particular on the America, so do you have America, so you probably won't see much of a cost that benefits that greatly, I'm wrong. Question was on the America, sorry, didn't you? Yeah, indeed from the 90, from the 90% right now, more towards the 85% we can accelerate with the different revenue weeks. No, as I said also to the before, and I've said previous obviously we're working towards the mid teens, profit margin over the next couple of years, that's where, we know we have to narrow the gap where we are, that's where we are working towards, and that also features into the less than 70% cost income ratio by the end of 26, getting to that level. So, you know, nothing that I've guided to today has changed any of that, we're very focused on taking the steps to achieve that by that in that time frame.

Unknown Executive: And, you know, that's a little bit of what we're seeing in our outlook is just given the fact that we expect and are modeling rates coming in that we are seeing sort of, in a way, the last vestige of mix shifts as well rates remain a bit higher.

Speaker Change #170: That's a little bit of what we're seeing in our outlook is.

Speaker Change #170: Just given the fact that we expect and are modeling rates coming in that.

Speaker Change #170: We are seeing sort of.

Speaker Change #170: In a way the last vestige of of mix shifts as well rates remain a bit higher.

Unknown Executive: So, that's how we see the deposit mix shifts evolve.

Speaker Change #170: So that's how we see the deposit mix shifts evolving.

Unknown Executive: Thank you.

Speaker Change #171: Thank you.

Speaker Change #171: Okay. Thank you.

Speaker Change #171: Yeah, thanks a lot, Andrew.

Speaker Change #171: So on the on the second one, in terms of on the costs and the the performance and outperformance we're continuing to see, I mean, that's really driven, as I highlighted in my comments by NCL.

Speaker Change #171: For sure, NCL has driven the lion's share of the of the gross cost saves to date.

Speaker Change #171: While the other divisions have contributed, it has been really a function of their active rundown of positions, but also the restructuring of various parts of Credit Suisse's G-SIB that we've highlighted in the past is an important part of taking out costs.

Speaker Change #172: And a lot of those costs reside, you know, in in in NCL.

Unknown Executive: Okay, there are no more questions.

Speaker Change #172: So they've been really the benefactor of the cost performance.

Speaker Change #171: Okay.

Speaker Change #173: And as we look out towards the end of the year, the additional progress that we anticipate, even though, as I suggest, we expect a bit of moderate deceleration in the gross cost saves, that's expected to be yielded also by NCL.

Speaker Change #172: No more questions.

Speaker Change #173: And as I highlighted, you know, the core business divisions will then it'll the ratio of core to non-core or non-core to core in terms of cost takeout will invert as we get into the second half of the of the integration agenda.

Unknown Executive: Thank you all for calling in and your questions, and see you in end of October for the Q3 results. Thank you.

Speaker Change #173: And we'll start to see this, the significant cost reductions hitting through in particular GWM and and PNC.

Speaker Change #173: Thank you all for calling in and your questions and see.

Speaker Change #173: And then just on the first in terms of how we see the the natural runoff and the success we've had in the in the quarter, you know, of course, we're not counting on, you know, extrapolating and we take economic decisions as they arise and the opportunities arise.

Speaker Change #173: So, you know, difficult to extrapolate the the great outcome that we've had to date to suggest a different outcome than than the natural roll off.

Speaker Change #173: And that's why we continue to disclose it.

Speaker Change #173: So, you know, that that becomes clear what is important.

Speaker Change #173: See you in the end of October for the Q3 results. Thank you.

Speaker Change #173: And Sergio commented this in his in his remarks that, you know, the uncertainty delta continues to narrow. And that's what I think is important that, you know, ultimately, while we can't count on anything in particular in terms of what can come off the balance sheet of NCL in terms of extrapolation, what we can say is that the uncertainty delta has narrowed very significantly.

Speaker Change #173: That's clear, thank you.

Speaker Change #173: Thank you.

Speaker Change #173: I guess the follow on would just be your previous guidance was for a typical run rate of close to zero revenues from NTL per quarter, and presumably that's unchanged.

Speaker Change #173: Yeah, as I said, Andrew, that we see in the in the long term, that's for sure the case in the in the short term, i.e.

Speaker Change #173: the 2h guidance that I offered, we see some modest upside to current book values on the revenue side.

Speaker Change #173: So some modest uptake in in driving the billion underlying PBT loss guidance that I offered in my comments.

Speaker Change #173: <unk>.

Unknown Executive: Ladies and gentlemen, the webcast and Q&A session for analysts and investors is over. You may disconnect your lines.

Speaker Change #174: The next question is from Jeremy Sigee from BNP Paribas.

Speaker Change #174: Ladies and gentlemen, the webcast and Q&A session for analysts and investors is over you may disconnect. Your lines. We will now take a short break and continue with media Q&A session at 10 45 C. P.

Speaker Change #174: Please go ahead.

Speaker Change #174: Hi there, thank you.

Speaker Change #174: Two questions please.

Speaker Change #174: The first one just follows on from just exactly what you were talking about there, the guidance for the P&L drag from NCL.

Speaker Change #174: Obviously it's going better than expected, which is great to see.

Speaker Change #174: You may disconnect your lines.

Speaker Change #174: What would we expect now?

Speaker Change #174: Previously you were talking about 2 billion P&L drag exit rate in 2025 and then 1 billion exiting 2026, and obviously it's going much better than that with sort of a 1 billion drag in the second half that you're integrating.

Speaker Change #174: We will now take a short break and continue with media Q&A session at 10.45 CET.

Unknown Executive: We will now take a short break and continue with the media Q&A session at 10:45 C.T. and and and and and and and and and and and and and and and and

Speaker Change #174: What should we expect for 2025 and could the NCL drag be finished within 2025 rather than carrying on into 2026?

Speaker Change #174: Any update on that would be really helpful.

Khaled: The next question is from from Khaled from KBW, please go ahead. Hi, thanks to take my questions, I'm just what do you assume in terms of loan and deposit grace in the Swiss business, NII guys and your GWM guys in the second half of the year? And then secondly, how do you see deposit mixed shifts and deposit beaters evolving within that guys as well?

Speaker Change #174: And then my second question, just a more sort of specific one, on investment banking costs.

Speaker Change #174: They drifted up a little bit more than revenues in the second quarter.

Speaker Change #174: It's not a big move, but the cost income deteriorated against those strong revenues rather than perhaps you might have hoped it could have improved a little bit.

Speaker Change #174: So any comments on the drivers, whether there's any one-offs in there or anything unusual, just how we should interpret that IB cost number, please.

Speaker Change #174: To Jeremy, thanks.

Speaker Change #174: On the second one, in the in the comp on on IBE costs, it's the comp quarter, of course, only has Credit Suisse personnel in for a short period of time for just the one month when you look at the the the year on year comp, whereas the current quarter has, you know, the the people we've added for the full quarter.

Speaker Change #174: [music].

Speaker Change #174: So that's driving that, that variant.

Speaker Change #174: I'm sorry, I was thinking queue on queue, I think the costs are up 3% and the revenues are up 1%, so I was thinking more queue on queue.

Speaker Change #174: Oh, yeah, on cue on cue, it would be just some, Some some compensation related effects that we're hitting through driving the the queue on cue, but I'd have to go back and look at that.

Speaker Change #174: But really, it's more year on year that we're focused on, on the in terms of the guidance on the P&L drag in in NCL in terms of what we should expect look I mean we're really pleased with the performance we've had to date as I said in in my last comments there's no way to extrapolate from that performance a straight line and to assume that that's the you know the the pace of which will continue so you know we our guidance remains that's where in terms of the P&L drag at the end of 26 is right now still our best estimate when we come back and talk about an outlook in the fourth quarter going forward you know potentially we update that and see where we are but for now that's that's our best estimate in terms of where where we land, Understood.

Speaker Change #174: Thank you very much.

Speaker Change #174: The next question is from Kian Abouhossein from J.P. Morgan.

Speaker Change #174: Please go ahead.

Speaker Change #174: Yeah, thanks for taking my questions.

Speaker Change #174: The first one is related to wealth management.

Speaker Change #174: First of all, thanks again, Todd, for the disclosure.

Speaker Change #174: I hope some of the US peers are listening.

Speaker Change #174: This was very helpful relative what I heard before from US peers.

Speaker Change #174: Sweep deposits, last disclosure was $35.7 billion.

Speaker Change #174: I was wondering where we are roughly right now in the US entity.

Speaker Change #174: If you could also share with us the advisory part of that, so we can kind of understand the adjustment factor, and what rate you are paying now versus what rate you will be paying for the sweep deposits on these advisory mandates.

Speaker Change #174: And in that context, if you could briefly talk about lending, which was down ex-US, just to understand how much of that is related to adjustments of your offering to the CS clients versus actually losses in lending.

Speaker Change #174: And then the second question is on legal entity on page 19.

Speaker Change #174: It's a very useful chart.

Speaker Change #174: And you talk about further legal entity simplification in the US as well as the UK legal entity going into a branch.

Speaker Change #174: I was wondering what capital release you expect from that, or maybe even in subjective terms, if you can talk a little bit about the changes that will happen when you describe it here on the page.

Speaker Change #174: Thanks, Kian, for the question.

Todd Tuckner: Thank you. Yeah, thanks Tom. So, in terms of volumes in each of the businesses, you know, I expect loans in both of the businesses through the end of 2024 to come slightly in, largely because of the, the balance sheet work that I highlighted in my comments. So, I think in both cases, loans would come in, I see deposits as well through the GWM side as well towards the end of the year.

Speaker Change #174: So in terms of the second one, first, the simplification that we talk about is, you know, continuing in the UK and the US, but also in other parts of the world, to continue merging subsidiaries out of existence to create and unlock more capital funding and tax efficiency.

Speaker Change #174: So that's what we're getting to.

Speaker Change #174: So we're working all through that, you know, we just, of course, did the big parent bank and Swiss bank mergers, we reparented the IHC.

Speaker Change #174: But now there's still a lot of work that will continue to unlock these benefits.

Speaker Change #174: So in terms of capital relief, naturally, to the extent that, and this goes a little bit to the question that was asked earlier, in terms of the repatriation of excess capital, say in a subsidiary, of course, that is, There are contingencies to the timeline in terms of what triggers and what the timing could be to merge some of these entities out of existence.

Speaker Change #174: In terms of GWM, so what I could say on the sweep deposits, first of all, advisory is about a third of the total that we have in sweeps, so just to dimension that a bit, I think that's probably useful to understand.

Speaker Change #174: And then as far as the pricing, it goes, of course, the way we're, first of all, it's a function of interest rates, because I mentioned we're going to introduce the new rates and advisory in the fourth quarter, because we have to change systems and go through some transitional work to get there.

Speaker Change #174: So, we have to see also where interest rates are, so in terms of an absolute price that I can't offer.

Speaker Change #174: But what I can say is that we will for sure price in the value of the insurance coverage we offer on deposits that benefit from multiple programs, multiple bank programs and reciprocal programs that we've invested in.

Speaker Change #174: And that will feature into the price of the rate we ultimately offer.

Speaker Change #174: In terms of lending balances ex-U.S., the main driver of that, I mean, you know, clearly we've seen deleveraging in a higher interest rate market for outside the U.S., particularly in APAC, for several quarters running.

Speaker Change #174: You know, we're looking forward and seeing some signs of tapering there, but we continue to see that.

Speaker Change #174: As I highlighted, you know, as rates come down, we do expect that that should taper and then start to see clients re-leverage.

Speaker Change #174: So the rate environment is driving some of that, but the other part of it, perhaps the more significant driver, is the financial resource optimization work we're doing that, you know, consequence of that is that loans will roll off our platform, which is one of the points I highlighted in connection with the net new asset report.

Speaker Change #174: And Todd, just on sweep, I know that Morgan Stanley has has confirmed 2% rate to be paid.

Speaker Change #174: Should we look at similar rates?

Speaker Change #174: And could you just also remind us of where we are on the sweep volumes at the moment?

Speaker Change #174: Last number we saw was $35.7 billion.

Speaker Change #174: Yeah, what I could say is that the number is probably come in a little bit and it's driven is in also some of the comments I made on mix is driving the 2Q result.

Speaker Change #174: So you could you could assume that number has, has come a little bit lower.

Speaker Change #174: And all I could say, you know, get anything further on the rate is, you know, as mentioned, competitive dynamics, you know, will ultimately feature and how we want we ultimately settle on, on a price on a rate on a price for this week deposit.

Speaker Change #174: So, you know as I said I gave I gave some views on on considerations that we that that we will factor in but as far as an absolute price you know that's that's not at this point something that we have settled on, The next question is from Anke Reingen from RBC.

Speaker Change #174: Please go ahead.

Speaker Change #174: Thank you very much for taking my questions.

Speaker Change #174: The first one is just on the Basel IV impact of the 25 billion on the 1st of January 2025.

Speaker Change #174: I guess you said you would give us a bit more detail potentially before year-end, but, I mean, you previously talked about a 15 billion net of non-core rundown.

Speaker Change #174: Can you give us a better indication of how the 25 billion will actually look on the 1st of January 2025?

Speaker Change #174: Coming back on the NII guidance, just confirming the P&C reiterating of guidance that, on a U.S. dollar basis rather than such franc.

Speaker Change #174: And just conceptually, I mean, let's see.

Speaker Change #174: I mean, you now assume more rate cuts than before, but the guidance is reiterated.

Speaker Change #174: Can you just maybe highlight what the missing piece is that allows you to reiterate guidance?

Speaker Change #174: Thank you very much.

Speaker Change #174: Thanks, Hank.

Speaker Change #174: So on Basel III final, you know, as mentioned, we still expect $25 billion impact-ish, 5% of risk-weighted assets. So in that range, as you mentioned, we guided in the fourth quarter in our investor update that $15 billion in the core, $10 billion in non-core.

Speaker Change #174: I think for now that split remains pretty robust in terms of how we're thinking, how we're seeing it.

Speaker Change #174: And naturally, we'll continue to work down the NCL portfolio to make that impact lessened over time.

Todd Tuckner: I mean, roughly flat at this point, I see PNC growing deposits, whether, you know, through the rest of this year, but certainly as we look out over the longer term. So, I would say a little bit of downward pressure in terms of loans and large parts is given the balance sheet work that we're doing on the deposit side, I see more sort of flat to growing in the near to midterm in terms of the balance sheet.

Speaker Change #174: In terms of the NII guidance for PNC, just to, you know, you asked for clarity on, it is in Swiss francs, so we're guiding in Swiss francs.

Speaker Change #174: We'll offer, you know, both in the future to sort of help, as I mentioned, in 3Q, we see low, a low single digit down in Swissy, but flat sequentially in USD.

Speaker Change #174: And as I mentioned, you know, I think that's a good outcome that we've had a number of headwinds that we've been working through. So to reaffirm the guidance for the full year is also a function of some management actions that have been taken, including, Some loan repricing action, that have helped so.

Speaker Change #174: Those are the drivers of the NII guidance for PNC.

Speaker Change #174: Sorry, just to follow up.

Speaker Change #174: So on the 1st of January 25, it's a 25, I mean a 5% increase in RWA or should it be lower because some mitigation MCL rundown has already kicked in or reduced the impact?

Speaker Change #174: The estimate is on the same basis we gave it in 4Q in terms of the impact because it's mainly FRTB driven.

Speaker Change #174: For now, assume the guidance remains, and as I said, if we have an update before we go live with it, of course, we'll come back and provide it.

Speaker Change #174: Okay, thank you very much.

Speaker Change #174: The next question is from Chris Hallam from Goldman Sachs.

Speaker Change #174: Please go ahead.

Speaker Change #174: Yeah, good morning, and thanks for taking my questions.

Speaker Change #174: So first, you've guided for banking to generate almost twice the baseline revenues by 2026, assuming supportive markets.

Speaker Change #174: So obviously, performance was very strong in the second quarter.

Speaker Change #174: But then we've had this period of elevated volatility at the start of August.

Speaker Change #174: Has that changed anything, in terms of how close we are now to supportive markets?

Speaker Change #174: And how would you expect the recovery to progress through the second half of this year?

Speaker Change #174: And then second question, just on profitability, at the start of the year, You said you'd expect to get to around 45% of the $13 billion gross savings by the end of 2024 and you've got there by the end of the first half.

Speaker Change #174: And you also guided for a mid-single digit underlying return on quarter one for this year, mid to high for next year, consensus is at 6% for this year, 9% for next year, but in the first half, you're already above nine.

Speaker Change #174: So how should we be thinking now about the path for underlying return on core tier 1 through 2024 and 2025?

Speaker Change #174: Thank you, Chris.

Speaker Change #174: I'll take the first question.

Speaker Change #174: So, look, you know, I think, of course, the market environment is, it's quite volatile.

Speaker Change #174: And there are elements of fragility that we see.

Speaker Change #174: But, you know, what is most important for us is, is to look through the short term market dynamics.

Speaker Change #174: And, you know, I can tell you that I'm very confident that we are building up a very compelling pipeline in terms of mandate that we win, still not announced, and things that can be then executed in a normalized market environment. Of course, if we see the kind of volatility we had a couple of weeks ago, that would not be very helpful for the pipeline, but in general, I stay, you know I would say that positive in respect of our momentum so a good pipeline and good good momentum in winning mandates but of course it will also depend on market conditions.

Speaker Change #174: I'm Chris.

Speaker Change #174: I'm the second in terms of a return on core tier one and, How it relates to our guidance.

Speaker Change #174: So you know, as you as you mentioned, we initially guided it mid for mid single digits for 24 and mid to high for 25.

Speaker Change #174: So naturally, if there's an update, we'll bring it to you when we talk about our 25 expectations later this year.

Speaker Change #174: In terms of where we are, you know, as Sergio highlighted in his comments are the first six months we generated an underlying return on CETY, one of 9.2%.

Todd Tuckner: In terms of deposit mixed shifts, look, I think in the end where, you know, we've been seeing as many banks have the effects of deposit mix and cash sorting and rotation for some period of time, you know, as rates start to come down. We expect that the cash sorting will, you know, continue to taper and will be less of an impact in terms of the NII. And, you know, that's a little bit of what we're seeing in our outlook is just given the fact that we expect and are modeling rates coming in that we are seeing sort of in a way the last vestige of mix shifts as well rates remain a bit higher. So, that's how we see the deposit mix shifts evolve.

Speaker Change #174: So obviously, we're comfortably ahead of the target of mid for 2024.

Speaker Change #174: The next question is from Amit Goel from Mediobank.

Speaker Change #174: Please go ahead.

Speaker Change #174: Hi, thank you.

Speaker Change #174: Thanks for taking my questions.

Speaker Change #174: So one, just to follow up, just to make sure I also heard some of the previous guidance correctly, I think you mentioned the cost of the reprice on Sweep to be about $50 million annually.

Speaker Change #174: So I mean, I guess given the one third advisory disclosure, that would imply only, you know, just just over 40 bits of incremental cost on that portion, and effectively nothing on the rest.

Speaker Change #174: So you know I was just kind of curious I mean in a way then you could continue to see outflows so I'm wondering what the capacity is for the group to replace that funding at similar costs?

Speaker Change #174: And then also just linked to that, if I look then at the total sweep and the cost of sweep, it seems like the earnings are pretty similar to what Wealth Management America generates.

Speaker Change #174: So I'm just kind of also curious how.., and how you think about work management America's profitability and and with some of these headwinds how you think you'll get back to that mid-teens operating margin.

Speaker Change #174: And then secondly, just curious on the parent, you know, is there any scope to shift exposure from foreign participations to domestic, in addition to capital repatriation and, you know, whether that can be reflected in participation values, you know, if there is potentially more change coming?

Speaker Change #174: Thank you.

Speaker Change #174: Thanks, Amit.

Speaker Change #174: Yeah, in terms of the second one, shifting exposure domestically, you know, whether that helps, it's way too early to speculate on how we're going to address and what actions we take, we don't know what the standards are.

Speaker Change #174: So, and where they'll move, meaning where the standards will move, assuming they move.

Speaker Change #174: And so to speculate about what mitigating actions might be available to us is way too early.

Speaker Change #174: In terms of sweeps, yeah, I disclosed that the impact on pre-tax profit is expected to be around $50 million annualized in the U.S. wealth business. You know, I did say that that's a net of offsetting factors.

Speaker Change #174: So that includes an array of banking initiatives and expense programs across various categories.

Speaker Change #174: So there, you know, I wouldn't I wouldn't take the 50 as gross income, but actually, as I said, it is it is a net impact.

Speaker Change #174: And I think, look, you know, you know, I saw interesting that you asked the question and then, you know, lead to how we're we're going to address, you know, the pre-tax margin issues, that nothing has changed on that where, you know, we, We're focused on that.

Unknown Executive: Thank you.

Speaker Change #174: We know what we have to do.

Speaker Change #174: The sweep deposit issue, you know, is a modest hit on that, of course, because it's, it's something we're saying is, is adverse to PBT. We think it's manageable.

Speaker Change #174: And now we're getting on with the work of, of, of improving the margins on the basis of how we've described that in the past.

Speaker Change #174: So we know we have to do there and, and we're taking steps to, to achieve that.

Speaker Change #174: The next question is from Benjamin Goy from Deutsche Bank.

Speaker Change #174: Please go ahead.

Speaker Change #174: Hi, good morning.

Speaker Change #174: I have two questions for you.

Speaker Change #174: So, the first one on GWM, in particular America, the cost-income ratio remains above 90% then. It was better during low-interest-rate times.

Speaker Change #174: So, just wondering, with the mix shift from NRI or NRI falling more towards cheap, most likely, will you see upside to your end-26 cost-income-ratio improvement target?

Speaker Change #174: And then, secondly, on the capital side, you obviously have the group guidance of 14% CT1, but do you see the 12.5% more of the binding constraint?

Speaker Change #174: That's the first half of the question.

Speaker Change #174: The second is, with Switzerland being essentially the only geography, introducing FRTB and not delaying it, do you think that's the final piece of the puzzle in terms of higher capital requirements for you?

Speaker Change #174: Thank you.

Speaker Change #174: Let me take the second part of the questions.

Speaker Change #174: Of course, you know, you know, the 14% guidance we have right now stays as it is, the 12.5% you mentioned is a look through fully applied 2030 current requirements, we will see exactly how things develop in the next few quarters in terms of future requirements.

Speaker Change #174: From an FRTB standpoint of view, of course, as you mentioned, Switzerland will introduce that on January 1, it will be a short term competitive disadvantage, we don't believe it's, we believe it's manageable short term, of course, if this should other jurisdictions not converge, not to converge to Basel III full implementation over the next couple of years, then, of course, that would be a little bit more problematic.

Speaker Change #174: And we would need to think about how to address this matter.

Speaker Change #174: So we remain confident that we will be able to have a level playing field in how we operate and compete globally, but it remains to be seen.

Speaker Change #174: Benjamin, here's how we think about your cost-to-income ratio question for GWM.

Speaker Change #174: We have a look-through cost-to-income ratio presently of around 80%.

Speaker Change #174: Naturally, when we plan the $13 billion of gross cost saves and the less than 70% cost-to-income ratio, GWM factors in quite prominently in that piece of work, and that's why I've highlighted that the cost-to-income ratio will be benefited by the work that's just going to get going in the next quarter or two, which is the client account migration work and platform consolidation, starting in, in APAC in parts of Europe before the Swiss Booking Center.

Speaker Change #174: That will drive significant costs down and ultimately, you know, which is why I believe that Wealth and P&C will benefit significantly in the latter half of the integration work.

Speaker Change #174: So in terms of where we'll get our cost income ratio, it will, GWM's cost income ratio in the end will be a big contributor to the group. Meeting its target of less than 70% by the end of 2026.

Speaker Change #174: Thanks, Konstantin.

Speaker Change #174: This was in particular on the America, for GWM America, where you probably won't see much of a cost-based benefit, but correct me if I'm wrong.

Speaker Change #174: Question was on the Americas.

Speaker Change #174: Sorry, I didn't.

Speaker Change #174: Yeah, indeed, from the 90% right now, more towards the 85% where we can accelerate with the different revenue mix.

Speaker Change #174: Thank you.

Speaker Change #174: The next question is from Tom Hallett from KBW.

Speaker Change #174: Please go ahead.

Speaker Change #174: Hi, thank you for taking my questions.

Speaker Change #174: I'm just curious, what do you assume in terms of loan and deposit growth in the Swiss business, NII guide, and your GWM guide in the second half of the year?

Speaker Change #174: And then secondly, how do you see deposit mix shifts and deposit betas evolving within that guide as well?

Speaker Change #174: Thank you.

Speaker Change #174: Yeah, thanks, Tom.

Speaker Change #174: So in terms of in terms of volumes, in each of the businesses, you know, I expect loans, Thank you growing deposits, whether, you know, through the rest of this year, but certainly as we look out over the longer term.

Speaker Change #174: So I would say a little bit of downward pressure in terms of loans in large part, just given the balance sheet work that we're doing on a deposit side, I see more sort of flat to growing in the in the near to midterm in terms of the balance sheet.

Unknown Executive: Okay, there are no more questions. Thank you all for calling in and your questions and see you in end of October for the Q3 results. Thank you. Ladies and gentlemen, the webcast and Q&A session for analysts and investors is over. You may disconnect your lines.

Speaker Change #174: In terms of deposit mix shifts, look, I think in the end where we've been seeing as many banks have the effects of deposit mix and cash sorting and rotation for some period of time, you know, as as rates start to come down, we expect that the cash sorting will continue to taper and it'll be less of an impact in terms of the NII.

Speaker Change #174: And, you know, that's a little bit of what we're seeing in our outlook is just given the fact that we expect and are modeling rates coming in that we are seeing sort of in a way, the last vestige of of mix shifts as well rates remain a bit higher.

Speaker Change #174: So so that that's how we see the deposit make shifts evolve.

Speaker Change #174: Thank you.

Speaker Change #174: Okay, there are no more questions.

Speaker Change #174: Thank you all for calling in and your questions and see you.

Speaker Change #174: Thank you.

Speaker Change #174: Ladies and gentlemen, the webcast and Q&A session for analysts and investors is over.

Unknown Executive: We will now take a short break and continue with media Q&A session at 10.45 C.T.

Unknown Executive: and and and and and and and and and and and and and and and and

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