Q1 2025 UBS Group AG Earnings Call

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Operator: Ladies and gentlemen, good morning. Welcome to the UBS first quarter 2025 results. The conference must not be recorded for publication or broadcast. You can register for questions at any time by pressing star and 1 on your telephone. Should you need operator assistance, please press star and 0.

Ladies and gentlemen, good morning, welcome to the UBS first quarter 2025 results.

Speaker Change: The conference must not be recorded for publication or broadcast you can register for questions at any time by pressing star one on your telephone should they need operator assistance. Please press star and zero at this time, it's my pleasure to hand over to Sarah Mccabe UBS Investor Relations. Please go ahead Madam.

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: Good morning, and welcome everyone before we start I would like to draw your attention to our cautionary statement flight 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 Mackey: 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. On slide two, you can see our agenda for today.

On slide two you can see our agenda for today, it's now my pleasure to hand over to Sergio <unk> Group CEO.

Sergio Ermotti: It's now my pleasure to hand over to Sergio Ermotti, Group CEO. Thank you, sir. And good morning. Our strong results in the first quarter demonstrate once again our ability to deliver for stakeholders in different market conditions. The quarter was characterized by a substantial shift in industrial sentiment and growth expectations alongside periods of significant market volatility. This damped the positive seasonal effect that we typically experience at the start of the year and tempered the bullish outlook the market had coming out of 2024 and into the first few weeks of January.

Speaker Change: Okay.

Sergio: Thank you Sarah and good morning, everyone.

Sergio: Our strong results in the first quarter demonstrate once again, our ability to deliver for stakeholders in different market conditions. Our quarter was characterized by a substantial shift in industrial sentiment and growth expectations alongside periods of significant market volatility.

Speaker Change: <unk> the positive the seasonal effects that we typically experience at the start of the year.

Speaker Change: Temper the bullish outlook the market had coming out of 2024 and into the first few weeks of January.

Sergio Ermotti: Against this backdrop, these results reflect the power and scale of our diversified global franchise, our unwavering commitment to clients, disciplined cost management, and the substantial progress made in integrating credit systems. All this is underpinned by a balance sheet for all. First quarter net profit reached $1.7 billion and our underlying return on CT1 capital stood at 11.3%, supported by positive operating leverage in our core business. Net new inflows onto our asset gathering platform were robust, including 32 billion in net new assets in global wealth management and 7 billion net new money in asset management. Although we haven't seen a major strategic shift in asset allocation, the breadth and depth of our advice and global capabilities help clients protect their wealth and navigate the market volatility.

Speaker Change: Against this backdrop <unk> results reflect the power and scale of our diversified global franchise, our unwavering commitments to clients disciplined cost management and the substantial progress made in integrating credit Suisse.

Speaker Change: All of this is underpinned by a balance sheet for all seasons.

Speaker Change: Okay.

Speaker Change: First quarter net profit reached a $1 7 billion.

Speaker Change: Our underlying return on CET, one capital stood at 11, 3% supported by positive operating leverage.

Speaker Change: Our core businesses.

Speaker Change: Net new inflows onto our asset gathering platform, where robust, including 30 to be done in menu assets in our global wealth management and <unk> net new money in asset management.

Speaker Change: Although we haven't seen a major strategic shifts in asset allocation, the breadth and depth of our advice and global capabilities helps clients protect their wealth and navigate the market volatility.

Sergio Ermotti: There is a significant demand for mandate solutions, structure products and alternatives, including new offerings within our Unified Global Alternatives Unit, where total assets reached nearly 300. For our clients in Switzerland, we kept delivering on our commitment to be a reliable partner. During the quarter, we granted or renewed 40 billion Swiss francs of loans. In the investment bank, we continue to execute on our capital light strategy. Investments we made in our areas of strategic importance allowed us to win further market share. Global markets achieved its best quarter on record. In global banking, we outperform the fee pools in M&A and ECM, despite a challenging market backdrop.

Speaker Change: We saw significant demand for mandate solutions structured products and alternatives, including new offerings within our unified global alternatives units, where total assets reached nearly 300 billion.

For our clients in Switzerland, we kept delivering on our commitments to be a reliable partner.

Speaker Change: During the quarter, we granted or renewed 40 billion Swiss francs of loans.

Speaker Change: In the investment bank, we continue to execute on our capital light strategy.

Speaker Change: The investments we made in our areas of strategic importance allowed us to win further market share.

Speaker Change: Global markets achieved its best quarter on record.

Speaker Change: And global banking, we outperformed the <unk>.

Speaker Change: M&A and ECM, despite a challenging market backdrop.

Sergio Ermotti: I'm also pleased to see that we are building on our already healthy pipeline.

Speaker Change: I'm also pleased to see that we are building on our already healthy pipeline.

Speaker Change: Okay.

Sergio Ermotti: As the second quarter kicked off, the unveiling of significant changes to tariffs on trading partners by the U.S. administration increased uncertainty and marked volatility. while in some days trading volumes exceeded their COVID-era peak by around 30%. I'm especially pleased, by the way, our colleagues were able to intensify their engagement with institutional and private clients during this period. The investments we have made to reinforce our infrastructure are paying off, with our operations proving stable and resilient. as we facilitate client activity across asset classes.

Speaker Change: As the second quarter kicked off the unveiling of significant changes to Terry's on trading partners by the U S administration increased uncertainty and market volatility.

Speaker Change: Riding some days trading volumes exceeded their COVID-19 era peak by around 30%.

Speaker Change: I'm, especially pleased by the way our colleagues who are able to intensify their engagement with institutional and private clients. During this period.

Speaker Change: The investments we have made to reinforce our infrastructure are paying off with our operations proving stable and resilient.

Speaker Change: As we facilitate client activity across asset classes.

Sergio Ermotti: Looking ahead, the economic path forward is particularly unpredictable, and the range of possible outcomes is wide. The prospect of higher tariffs on global trade presents a material risk to global growth and inflation. While we are encouraged that negotiations are ongoing, a prolonged period of discussion and speculation will come at a cost. Uncertainty is likely to affect sentiment and lead businesses and investors to delay important decisions on strategy, capital allocation, and investment. In this environment, we expect financial markets to remain sensitive to new developments, both positive and negative. which are likely to lead to further spikes in volatility.

Speaker Change: Looking ahead, the economic path forward is particularly unpredictable and the range of possible outcomes is wide.

Speaker Change: The prospect of higher tariffs on global trade presents a material risk to global growth and inflation.

Speaker Change: While we are encouraged that negotiations are ongoing a prolonged period of discussion and speculation will come up a cost.

Speaker Change: Uncertainty is likely to affect sentiment and lead businesses and investors to delay important decisions on strategy capital allocation and investment.

Speaker Change: In this environment.

Speaker Change: <unk> financial markets to remain sensitive to new developments, both positive and negative.

Speaker Change: <unk> are likely to lead to further spikes in volatility.

Sergio Ermotti: In light of this We are unwavering in serving our clients, executing on our growth strategy and following through on our integration plan. on that over the course of of the first quarter, we finalized our preparations to meet to migrate more than 1 billion clients in Switzerland onto UBS platforms and continue to integrate 95 petabytes of data. We moved a small pilot group of clients at the start of April and we are on track to complete the first main wave of migrations by the end of the second quarter. We are pleased with our progress in non-core and legacy as we continue to reduce the complexity of our operations through book closures and decommissioning of applications.

Speaker Change: In light of this we are unwavering in serving our clients executing on our growth strategy and following through on our integration plans.

Speaker Change: And that's over the course of this.

Speaker Change: After the first quarter, we finalized our preparations to meet to migrate more than 1 billion clients in Switzerland until UBS platforms and continued to integrate 95 petabytes of data.

Speaker Change: We moved a small pilot group of clients at the start of April and we are on track to complete the first main wave of migrations by the end of the second quarter.

Speaker Change: We are pleased with our progress in noncore and legacy as we continue to reduce the complexity of our operations through book closures and the decommissioning of applications.

Sergio Ermotti: Moreover, our active wind-down efforts have proven so effective that we have been able to upgrade our credit and market risk-weighted assets ambitions for 2025 and 2026. Our CT1 ratio capital stands in line with our guidance at 14.3%, this combined with the substantial de-risking of the acquisition and our highly capital generative strategy gives us confidence in our ability to deliver on our 2025 capital return objective. This remains contingent on maintaining a CT1 capital ratio of around 14% and the absence of material, immediate changes to the current capital regime. Our capital strength also supports our ability to deploy investments that reinforce our leadership across the globe and position UBS for the future.

Speaker Change: Moreover, our active wind down efforts have proven so effective that we have been able to upgrade our credit and market risk weighted assets ambitions for 2025 and 2026.

Speaker Change: Our CET one ratio capital stands in line with our guidance at 14, 3%. This combined with the substantial de risking of the acquisition and our highly capital generative strategy gives us confidence in our ability to deliver on our 2025 capital.

Speaker Change: Our return objectives.

Speaker Change: This will remain contingent on maintaining a CET one capital ratio of around 14% and the absence of material immediate changes to the current capital regime.

Speaker Change: Our capital strength also supports our ability to deploy investments.

Speaker Change: That reinforce our leadership across the globe and position UBS for the future.

Sergio Ermotti: We are working to further enhance our client offering and capabilities to improve profitability in the Americas. At the same time, we are building on our status as the number one wealth manager in APAC by scaling our offering in the fastest growing markets across the region. while reinforcing our leadership position in EMEA and Switzerland.

Speaker Change: We are working to further enhance our client offering and capabilities to improve profitability in the Americas.

Speaker Change: At the same time, we are building on our status as the number one wealth manager in APAC by scaling our offering in the fastest growing markets across the region.

Speaker Change: While reinforcing our leadership position in EMEA and Switzerland.

Sergio Ermotti: As highlighted in February, technology investments are a key enabler for growth. We are encouraged by our development and adoption of generative AI solutions as we empower our colleagues with tools to improve productivity and deliver tailored solutions to clients. In closing, we are pleased with our strong performance this quarter and continue to operate from a position of strength. But we are not complacent, as we are only around two-thirds of the way to restoring UBS's pre-acquisition levels of profitability. In that sense, the next phase of the integration is especially important to harvesting the full benefits of the acquisition for our clients and shareholders and delivering on our long-term ambition.

Speaker Change: As highlighted in February technology investments are a key enabler for growth.

Speaker Change: We are encouraged by our development and adoption of generative AI solutions as we empower our colleagues with tools to improve productivity and deliver tailored solutions to clients.

Speaker Change: In closing we are pleased with our strong performance this quarter and continue to operate from a position of strength.

Speaker Change: But we are not complacent as we are only around two thirds of the way to restoring ubs's pre acquisition levels of profitability.

Speaker Change: In that sense. The next phase of the integration is especially important to harvesting the full benefits of the acquisition for our clients and shareholders and delivering on our long term ambitions.

Sergio Ermotti: In the meantime, we are staying focused on what we can control. serving our clients, delivering on our financial targets, and continuing to act as an engine of economic growth in the communities we serve.

Speaker Change: In the meantime, we are staying focused on what we can control.

Speaker Change: Serving our clients delivering on our financial targets and continuing to act as an engine of economic growth in the communities we serve.

Todd Tuckner: With that, I hand over to Todd. Thank you, Sergio. And good morning, everyone. Throughout my remarks, I'll refer to underlying results in U.S. dollars and make year-over-year comparisons unless stated otherwise. During the first quarter of 2025, our core businesses grew their combined pre-tax profitability by 15% on strong positive operating leverage. Overall, our group profit before tax was $2.6 billion, down 1% year on year. Group revenues were broadly flat at $12 billion and up 6% across our core franchises. Operating expenses were also stable at $9.2 billion, as we continue to successfully reduce our non-production related costs across the group, offsetting higher financial advisor and variable compensation accruals in the quarter.

Todd: With that I hand over to Todd.

Todd: Thank you Sergio and good morning, everyone.

Todd: Throughout my remarks, I'll refer to underlying results in U S dollars and make year over year comparisons unless stated otherwise.

Todd: During the first quarter of 2025, our core businesses grew their combined pretax profitability by 15% on strong positive operating leverage overall, our group profit before tax was $2 6 billion down 1% year on year.

Todd: Group revenues were broadly flat at $12 billion and up 6% across our core franchises.

Todd: Operating expenses were also stable at $9 2 billion as we continue to successfully reduce our non production related costs across the group offsetting higher financial adviser and variable compensation accruals in the quarter.

Todd Tuckner: Our EPS was 51 cents. and we delivered an 11.3% return on CET1 capital and a cost-income ratio of 77.4%. As illustrated on slide 6, this quarter's underlying performance demonstrates the strength of our franchise and diversified business model, particularly in challenging and complex markets. by supporting clients in ways that differentiate UBS while maintaining a sharp focus on cost and resource efficiency. Each of Global Wealth Management, Asset Management, and the Investment Bank achieved double-digit pre-tax growth, absorbing net interest income headwinds that, in particular, weighed on our personal and corporate banking business. Our Non-Corps and Legacy Unit delivered a strong first quarter, although short of the exceptional results of last year's one.

Todd: Our EPS was <unk> 51.

Todd: And we delivered an 11, 3% return on CET, one capital and a cost income ratio of 77, 4%.

Todd: As illustrated on slide six this quarter's underlying performance demonstrates the strength of our franchise and diversified business model, particularly in challenging and complex markets.

Todd: By supporting clients in ways that differentiate UBS, while maintaining a sharp focus on cost and resource efficiency.

Todd: Each of global wealth management asset management, and the investment bank achieved double digit pre tax growth absorbing net interest income headwinds that in particular weighed on our personal and corporate banking business.

Todd: Our non core and legacy unit delivered a strong first quarter, although short of the exceptional results of last year's <unk>.

Todd Tuckner: On a reported basis, our pre-tax profit of $2.1 billion included $700 million of revenue adjustments from acquisition-related effects and $1.1 billion of integration expenses. Our effective tax rate in the quarter was 20%. For 2Q, we expect a tax rate of around zero due to a capital neutral tax credit from further legal entity streamlining in the U.S. and from other planning measures related to the integration. We continue to expect our full year 2025 effective tax rate to be around 20%, with a second half tax rate of around 30% influenced by NCL's reported pre-tax performance.

Todd: On a reported basis, our pre tax profit of $2 1 billion included $700 million of revenue adjustments from acquisition related effects and $1 1 billion of integration expenses.

Our effective tax rate in the quarter was 20%.

Todd: For <unk>, we expect a tax rate of around zero due to a capital neutral tax credit from further legal entity streamlining in the U S and from other planning measures related to the integration.

Todd: We continue to expect our full year 2025 effective tax rate to be around 20%.

Todd: With a second half tax rate of around 30% influenced by Ncl's reported pre tax performance.

Todd: Okay.

Todd Tuckner: Turning to our cost update on slide 7. In the first three months of 2025, we achieved an additional $900 million in gross run rate cost savings. bringing the cumulative total since the end of 2022 to $8.4 billion, or around 65% of our total gross cost-save ambition. By quarter end, we had nominally decreased our overall cost base by around 10% from our 2022 baseline. Yet looking through variable compensation and litigation and neutralizing for currency effects. We delivered an even greater net reduction in underlying expenses, exceeding 20%. As a result, more than 50% of our cumulative gross cost saves have translated into net saves that benefit our run www.fema.gov The overall employee count fell sequentially by 2% to 126,000 and by around 20% from our 2022 baseline.

Todd: Turning to our cost update on slide seven.

Todd: In the first three months of 2025, we achieved an additional $900 million and gross run rate cost saves, bringing the cumulative total since the end of 2022 to $8 4 billion or around 65% of our total gross cost save ambition.

Todd: By quarter end, we had nominally decreased our overall cost base by around 10% from our 2020 to baseline.

Todd: Yet looking through variable compensation and litigation and neutralizing for currency effects, we delivered an even greater net reduction in underlying expenses exceeding 20%.

As a result more than 50% of our cumulative gross cost saves have translated into net saves that benefit our run rate.

Todd: The overall employee count fell sequentially by 2% to 126000 and by around 20% from our 2020 to baseline.

Todd Tuckner: As I've highlighted in the past, one of the keys to meeting our target cost-income ratio by the end of 2026 is shutting down legacy Credit Suisse technology applications and infrastructure. To date, we've retired over a third each of these applications, computer servers, and data centers that are targeted in our plans for decommissioning. These actions have generated more than $700 million in technology cost saves with non-core and legacies balance sheet reduction a key driver of this progress. We expect that most of the remaining $4.5 billion in gross saves required to achieve our $13 billion target will come from reductions in technology, staffing, and vendor costs.

Todd: As I've highlighted in the past one of the keys to meeting our target cost income ratio by the end of 2026 is shutting down legacy credit Suisse technology applications and infrastructure.

Todd: To date, we've retired over a third each of these applications computer servers and data centers that are targeted in our plans for decommission.

Todd: These actions have generated more than $700 million in technology cost saves with noncore and legacy balance sheet reduction a key driver of this progress.

Todd: We expect that most of the remaining $4 5 billion in gross saves required to achieve our $13 billion target.

Todd: Will come from reductions in technology staffing and vendor costs.

Todd Tuckner: As an example of what's to come in the technology context is a run rate cost save of $800 million related to Credit Suisse's legacy applications in the Suisse Booking Center, which will decommission after the completion of the client account migration in 2026.

Todd: As an example of what's to come in the technology context is a run rate cost save of $800 million related to credit Suisse's legacy applications in the Swiss booking center, which will decommission after the completion of the client account migration in 2026.

Todd Tuckner: Turning to slide 8. As of the end of the first quarter, our balance sheet for all seasons consisted of $1.5 trillion in total assets, with around $615 billion in loan balances. $745 billion in deposits and a loan to deposit ratio of 80%. The strength of our balance sheet is not just an essential component of our strategy, but a competitive advantage and source of confidence for our clients, especially during times of uncertainty. A fundamental driver of our balance sheet strength is our credit. 93% of our lending positions are collateralized, with 57% of the total balance consisting of mortgages, where the average LTV is 50%.

Todd: Turning to slide eight.

Todd: As of the end of the first quarter, our balance sheet for all seasons consisted of $1 five trillion in total assets with around 615 billion in loan balances seven.

Todd: $745 billion in deposits and our loan to deposit ratio of 80%.

Todd: The strength of our balance sheet is not just in a central component of our strategy, but our competitive advantage and source of confidence for our clients, especially during times of uncertainty.

Todd: Fundamental driver of our balance sheet strength is our credit book.

Todd: 93% of our lending positions are collateralized with 57% of the total balance consisting of mortgages, where the average LTV is 50%.

Todd Tuckner: At the end of March, our lending book reflected credit-impaired exposures of 1%, unchanged from the prior quarter. The cost of risk decreased to 7 basis points as we recorded group credit loss expenses of $100 million, reflecting $121 million of net charges on credit-impaired positions and $21 million of net releases across our performing portfolio. The net releases were due to our recalibration of the expected credit loss scenarios and rebalancing of the factor weight.

Todd: At the end of March our lending book reflected credit impaired exposures of 1% unchanged from the prior quarter the cost of risk decreased to seven basis points. As we recorded group credit loss expenses of $100 million, reflecting $121 million of net charges on credit impaired positions in 'twenty.

Todd: $1 million of net releases across our performing portfolio.

Todd: The net releases were due to a recalibration of the expected credit loss scenarios and rebalancing of the factor weights.

Todd Tuckner: On to liquidity and funding. In the quarter, we made strong progress on our 2025 funding plan, already having completed our 81 issuances intended in 2025, in addition to having issued $3 billion in holdcode debt. I would highlight that our funding stability is underscored by the balanced currency mix across our assets and diversified sources of long-term funding and deposits. Our average LCR was 181% and remained around this level throughout April's volatile market.

Todd: Onto liquidity and funding in the quarter, we made strong progress on our 2025 funding plan already having completed our ATM issuances intended in 2025. In addition to having issued $3 billion in Holdco debt.

Todd: I would highlight that our funding stability is underscored by the balanced currency mix across our assets and diversified sources of long term funding and deposits.

Todd: Okay.

Todd: Our average LCR was 181% and remained around this level throughout April as volatile markets.

Todd Tuckner: Turning to capital on slide nine. Our CET1 capital ratio at the end of March was 14.3%. As a result of our continued progress with the integration, coupled with strong financial performance in the first quarter, it is now our intention to execute on all of our 2025 capital return ambitions announced in February. Consequently, our CET1 capital not only accounts for the $500 million in shares we purchased during the first three months of the year, but it also reflects the accrual of the remaining $2.5 billion share buyback we intend to execute through the rest of 2025, of which $500 million in the second quarter.

Todd: Turning to capital on slide nine our CET one capital ratio at the end of March was 14, 3%.

Todd: As a result of our continued progress with the integration of <unk>.

Todd: Coupled with strong financial performance in the first quarter.

Todd: It is now our intention to execute on all of our 2025 capital return ambitions announced in February.

Todd: Consequently, our CET, one capital not only accounts for the $500 million and shares repurchased during the first three months of the year.

Todd: But it also reflects the accrual of the remaining $2 5 billion share buyback, we intend to execute through the rest of 2025 of which $500 million in the second quarter.

Todd Tuckner: Risk-weighted assets fell by $15 billion sequentially, driven by lower asset size and the implementation of the final Basel III standards, which ultimately resulted in a net reduction of $9 billion in RWA. This revised amount reflects further infrastructure and data quality improvements finalized during the quarter, as well as the effects of additional mitigation and de-risking actions we took across various credit, counterparty, and market risk categories. After receiving regulatory approval, the final operational risk-weighted asset level also came in around $2 billion lower than our February estimate. Netted within the overall reduction, FRTB led to an increase of $6 billion, mainly related to the investment bank.

Todd: Risk weighted assets fell by 15 billion sequentially, driven by lower asset size and the <unk> implementation of the final Basel III standards, which ultimately resulted in a net reduction of $9 billion in <unk>.

Todd: This.

Todd: This revised amount reflects further infrastructure and data quality improvements finalized during the quarter as well as the effects of additional mitigation and Derisking actions, we took across various credit counterparty and market risk categories.

Todd: After receiving regulatory approval the final operational risk weighted asset level also came in around $2 billion lower than our February estimates.

Todd: Netted within the overall reduction fr <unk> led to an increase of 6 billion mainly related to the investment bank.

Todd Tuckner: At the same time, Despite the offsetting effects of mitigating actions, our leverage ratio denominator was $42 billion higher sequentially, resulting in a CET1 leverage ratio of 4.4%. The uplift in LRD was driven by an increase of $29 billion from derivatives exposures now calculated under the revised Basel III standardized approach for counterparty credit With FX accounting for a $27 billion increase in the quarter, these factors more than offset asset size reductions of $13 billion.

Todd: At the same time, despite the offsetting effects of mitigating actions, our leverage ratio denominator was $42 billion higher sequentially, resulting in a CET one leverage ratio of four 4%.

Todd: The uplift in <unk> was driven by an increase of $29 billion from derivatives exposures now calculated under the revised Basel III standardized approach for counterparty credit risk.

Todd: With FX accounting for 27 billion increase in the quarter.

Todd: These factors more than offset asset size reductions of $13 billion.

Todd Tuckner: A word on Parent Capital and Group Equity Double Leverage. As of the end of March, our parent bank's stand-alone CET1 capital ratio on a fully applied basis is expected to be 12.9% within our target range. The sequential reduction reflects an accrual for dividends intended to be paid in 2026. Over the next few quarters, the parent bank's dividend-paying capacity is expected to be supported by both dividends and capital repatriations from subsidiaries. In addition, earlier this month, as expected, UBS AG paid a $6.5 billion ordinary dividend to our holding company. Taking into account capital returns to shareholders completed or anticipated during the first half of the year, we expect the Group's equity double leverage ratio to improve to around 110% by the time we publish our Group stand-alone accounts at the end of the second quarter.

Todd: A word on parent capital and group equity double leverage.

Todd: As of the end of March our parent bank Standalone CET, one capital ratio on a fully applied basis is expected to be 12, 9% within our target range the sequential.

Todd: <unk> reduction reflects an accrual for dividends intended to be paid in 2026 over the next few quarters. The parent banks dividend paying capacity is expected to be supported by both dividends and capital repatriation from subsidiaries.

In addition earlier this month as expected UBS AG paid a $6 5 billion ordinary dividend to our holding company takes.

Todd: Taking into account capital returns to shareholders completed or anticipated during the first half of the year, we expect the group's equity double leverage ratio to improve to around 110% by the time, we published our group Standalone accounts at the end of the second quarter.

Todd Tuckner: These actions are consistent with our intention to restore the Group's equity double leverage ratio towards pre-acquisition levels over the next several quarters.

Todd: These actions are consistent with our intention to restore the group's equity double leverage ratio towards pre acquisition levels over the next several quarters.

Todd Tuckner: Turning to our Business Divisions and starting with Global Wealth Management on slide 2. GWM's pre-tax profit was $1.5 billion, up 21% year-over-year, as revenue growth outpaced expenses by 5%. This translated to a year-over-year improvement in GWM's cost-income ratio of over 3 percentage points to 75%.

Todd: Turning to our business divisions, and starting with global wealth management on slide 10.

Todd: Gws pre tax profit was $1 5 billion up 21% year over year as revenue growth outpaced expenses by five percentage points. This translated to a year over year improvement in gws cost income ratio of over three percentage points to 75%.

Todd Tuckner: in Asia, with our integration efforts now largely complete. We're well positioned to deliver our full range of capabilities to our clients. Notably, our APAC franchise drove excellent PBT growth of 36% on 14 points of positive operating JAWS and a pre-tax margin of over 40%. In the Americas, where we're executing on our growth plans, we delivered PBT growth of more than 40% and a pre-tax margin of 12%. In addition, each of our Switzerland and EMEA regions grew profits by 7% in the quarter. You can find additional regional details, including a breakdown of revenue lines, credit loss expenses, net new deposits, and customer deposit balances, as well as comparatives across our four wealth.

Todd: In Asia with our integration efforts now largely complete we are well positioned to deliver our full range of capabilities to our clients, notably our APAC franchise drove excellent PBT growth of 36% on 14 points of positive operating jaws, and a pre tax margin of over 40%.

Todd: In the Americas, where we're executing on our growth plans, we delivered PBT growth of more than 40% and a pretax margin of 12%.

Todd: In addition, each of our Switzerland, and EMEA regions grew profits by 7% in the quarter.

Todd: You can find additional regional details, including a breakdown of revenue lines credit loss expenses, net new deposits and customer deposit balances as well as comparative as across our four wealth regions and our newly enhanced disclosure in the quarterly report and on page 22 in the appendix.

Todd Tuckner: in our newly enhanced disclosure in the quarterly report, and on page 22 in the appendix to this presentation.

Todd: <unk> to this presentation.

Todd Tuckner: Onto Flows. GWM invested assets increased by 1% sequentially, with favorable currency effects and positive asset flows offsetting negative market performance. Net new assets in the quarter reach $32 billion, representing a 3% annualized growth rate, with growth in all regions. led by the Americas, where strong same-store performance supported NNA of $20 billion. Our flow performance again this quarter reflects the actions I've highlighted in the past regarding balance sheet optimization that support higher pre-tax margins and returns on attributed equity. but at times come at the expense of net new assets. For example, we again successfully managed the roll-off of preferential fixed-term deposits associated with our 2023 win-back campaign.

Todd: Onto flows.

Todd: Gws invested assets increased by 1% sequentially with favorable currency effects and positive asset flows offsetting negative market performance.

Todd: Net new assets in the quarter reached 32 billion, representing a 3% annualized growth rate with growth in all regions led by the Americas, where strong same store performance supported M&A of $20 billion.

Todd: Yeah.

Todd: Our flow performance again this quarter reflects the actions I've highlighted in the past regarding balance sheet optimization that support higher pre tax margins and returns on attributed equity.

Todd: But at times come at the expense of net new assets for.

Todd: For example, we again successfully manage the roll off of preferential fixed term deposits associated with our 2023 win back campaign of.

Todd Tuckner: Of the $54 billion in deposits maturing in one queue, as in prior periods, we converted around 85% into more profitable liquidity and investment solutions. but some less profitable flows left the platform. You can see the clear improvement we've achieved in enhancing profitability from these balance sheet actions in GWM's revenue over RWA ratio, which has grown two points year-over-year and has re-attained pre-acquisition levels. Further evidence of clients seeking our market-leading advice and solutions and helping drive sustainable revenue growth is underscored by our net new fee-generating asset performance of $27 billion in the quarter, a 6% annualized growth rate.

Todd: Of the 54 billion in deposits maturing in <unk> as in prior periods, we converted around 85% into more profitable liquidity and investment solutions.

Todd: Some less profitable flows left the platform.

Todd: You can see the clear improvement, we've achieved and enhancing profitability from these balance sheet actions in gws revenue over our <unk> ratio, which has grown two points year over year and has retained pre acquisition levels.

Todd: Further evidence of clients' seeking out market, leading advice and solutions and helping drive sustainable revenue growth is underscored by our net new fee generating asset performance of 27 billion in the quarter, a 6% annualized growth rate.

Todd Tuckner: We saw continued momentum in discretionary mandates, including SMAs in the U.S. and our signature MyWay solution. delivered through our Swiss and international platforms. MyWay mandates have grown to $20 billion, up almost 80% from the prior year quarter. NNFGA growth was especially strong in our APAC franchise, at an annualized growth rate of 10%, with mandate penetration at its highest level on record. Looking ahead to the second quarter, while maturing fixed-term deposits are becoming a less material headwind to flows.

Todd: We saw continued momentum in discretionary mandates, including SMA in the U S and our signature my way solution delivered through our Swiss and international platforms. My way mandates have grown to $20 billion up almost 80% from the prior year quarter.

Todd: And then FTA growth was especially strong in our APAC franchise at an annualized growth rate of 10% with mandate penetration at its highest level on record.

Todd: Looking ahead to the second quarter, while maturing fixed term deposits are becoming a less material headwind to flows.

Todd Tuckner: Seasonal U.S. tax-related outflows in the high single-digit billion range, elevated as a result of last year's strong market performance, are expected to weigh on GWM's 2Q net new asset. I would also highlight that we saw a modest pickup in lending across the wealth business. Client Releveraging Supported by a Lower Rate Environment. Net new loans were $2.2 billion, driven by Lombard lending in APAC.

Todd: Seasonal U S tax related outflows in the high single digit billion range elevated as a result of last year's strong market performance are expected to weigh on gws <unk> net new assets.

Todd: I would also highlight that we saw a modest pickup in lending across the wealth business with client, we leveraging supported by a lower rate environment.

Todd: Net new loans were $2 2 billion driven by Lombard lending in APAC.

Todd Tuckner: Turning to Revenue. GWM's top line increased by 6%, driven by elevated client engagement, increased solution take-up by clients seeking diversification across geographies and asset classes, and higher average asset levels. Recurring net fee income increased by 8% to $3.3 billion from positive market performance and over $70 billion in net new fee generating assets over the past 12 months. Margins continue to hold up sequentially and are expected to remain around these levels. Especially as recently migrated clients and those remaining on the Credit Suisse platform Now have access to the full breadth of our CIO value chain led capabilities and solutions Transaction-based income increased by 15% to $1.4 billion in a market environment where our franchise's enduring advantages set us apart.

Todd: Turning to revenues.

Todd: Gws topline increased by 6% driven by elevated client engagement increased solution take up by clients seeking diversification across geographies and asset classes and higher average asset levels.

Todd: Recurring net fee income increased by 8% to $3 3 billion from positive market performance and over $70 billion in net new fee generating assets over the past 12 months.

Todd: Margins continued to hold up sequentially and are expected to remain around these levels, especially as recently migrated clients and those remaining on the credit Suisse platform now have access to the full breadth of our CIO value chain led capabilities and solutions.

Transaction based income increased by 15% to $1 4 billion in a market environment, where our franchises enduring advantages set us apart.

Todd Tuckner: Without a major shift in asset allocation during the quarter, clients nevertheless actively reposition portfolios, benefiting from our investments in capabilities, solutions and unified capital. This drove double-digit growth across structured products and cash equities, with wealth planning and life insurance up by more than 50%. Alternatives are up 40% fueled by the joint Unified Global Alternatives Initiative with Asset Management. Regionally, we saw a continuation of transactional growth spanning the wealth franchise, led by AIPAC and the Americas, where transactional revenues increased by 28% and 16% respectively. Net interest income at $1.5 billion was down 4% year over year and 7% quarter over quarter.

Todd: Without a major shift in asset allocation during the quarter clients. Nevertheless, actively repositioned portfolios benefiting from our investments in capabilities solutions and unified teams.

Todd: This drove double digit growth across structured products and cash equities with wealth planning and life insurance up by more than 50%.

Todd: Alternatives were up 40% fueled by the joint unified Global alternatives initiative with asset management.

Todd: Regionally, we saw a continuation of transactional growth spanning the wealth franchise led by APAC and the Americas were transactional revenues increased by 28% and 16% respectively.

Todd: Net interest income at $1 5 billion was down 4% year over year, and 7% quarter over quarter with.

Todd Tuckner: with the sequential trend reflecting a lower day count and headwinds from declining rates in Swiss Franc and Euro. partially offset by ongoing balance sheet optimization effort. Of the sequential decline, one percentage point reflects a change to our client segmentation approach between GWM and PNC that we implemented in February but was not included in our guidance. This change led to a shift of some affluent clients from GWM to PNC, including loan balances of $8 billion. Despite the modest effect on NII, we ultimately decided to not restate our accounts for this transfer given the immaterial impact to the P&L of both divisions overall.

Todd: With the sequential trend, reflecting a lower day count and headwinds from declining rates in Swiss franc and euro.

Todd: Partially offset by ongoing balance sheet optimization efforts.

Todd: Of the sequential decline one percentage point reflects a change to our client segmentation approach between gws and P&C that we implemented in February but was not included in our guidance. This change led to a shift of some affluent clients from gws to P&C, including loan balances of $8 billion.

Todd: Despite the modest effect on NII, we ultimately decided to not restate our accounts for this transfer given the immaterial impact to the P&L of both divisions overall.

Todd Tuckner: Now to our NII outlook. For the second quarter of 2025, we expect GWM's net interest income to decrease sequentially by a low single-digit percentage, despite day count helping, primarily from lower Swiss franc and euro rates after the March cut. We also expect a seasonal decline in client deposits following April tax payments in the U.S. Although there could be upside, should clients maintain a more defensive posture amid ongoing market uncertainty? Driving Higher Sweep and Account Balance. For full year 2025, we continue to expect GWM's net interest income to decrease by a low single digit percentage compared to 2024.

Todd: Now to our NII outlook for the second quarter of 2025, we expect gws net interest income to decrease sequentially by a low single digit percentage. Despite day count, helping primarily from lower Swiss franc and euro rates after the March cuts.

Todd: We also expect a seasonal decline in client deposits following April tax payments in the U S.

Todd: Although there could be upside should clients maintain a more defensive posture amid ongoing market uncertainty driving higher sweep and account balances.

Todd: For full year 2025, we continue to expect Gws net interest income to decrease by a low single digit percentage compared to 2024.

Todd Tuckner: Underlying operating expenses were up by 1%, with lower personnel and support costs offset by higher variable compensation tied to revenue. Looking through variable compensation, litigation, and currency effects, costs were down 5% year-over-year.

Todd: Underlying operating expenses were up by 1% with lower personnel and support costs offset by higher variable compensation tied to revenues.

Looking through variable compensation litigation and currency effects costs were down 5% year over year.

Todd Tuckner: Turning to personal and corporate banking on slide 11, where my comments will refer to Swiss franc. PNC delivered first quarter pre-tax profit of $597 million, down 23% as lower interest rates led to an 18% reduction in net interest income. Recurring net fee income increased by 3%, driven by record volumes of investment products and personal banking, supported by strong sales momentum, including a 12% annualized growth rate in net new investment flows in the first quarter. Transaction-based revenues decreased by 2% as strong performance in personal banking was more than offset by the effect of lower corporate finance activity amid softer economic conditions.

Todd: Turning to personal and corporate banking on slide 11, where my comments will refer to Swiss francs.

Todd: P&C delivered first quarter pre tax profit of $597 million down 23% as lower interest rates led to an 18% reduction in net interest income.

Todd: Recurring net fee income increased by 3% driven by record volumes of investment products in personal banking supported by strong sales momentum, including a 12% annualized growth rate in net new investment flows in the first quarter.

Todd: Transaction based revenues decreased by 2% as strong performance in personal banking was more than offset by the effect of lower corporate finance activity amid softer economic conditions.

Todd Tuckner: Sequentially, NII decreased by 7%, largely reflecting the effects of the S&B's 50 basis point rate cut announced in December and a lower day count. partly offset by the effect of the client segmentation shift between GWM and PNC that I mentioned earlier, which provided a 1 percentage point quarter-on-quarter uplift to PNC. To mitigate the effects of lower rates, we adjusted deposit pricing on select products and continued optimizing our banking. Looking to the second quarter, we see a sequential decrease in the low single-digit percentage range for PNC's NII in Swiss francs, which translates to a sequential mid-single-digit percentage increase in U.S.

Todd: Sequentially NII decreased by 7% largely reflecting the effects of the Smbs 50 basis point rate cut announced in December and a lower day count.

Todd: Partly offset by the effect of the client segmentation shift between Gws and P&C that I mentioned earlier, which provided a one percentage point quarter on quarter uplift to P&C.

Todd: To mitigate the effects of lower rates, we adjusted deposit pricing on select products and continued optimizing our banking book.

Todd: Looking to the second quarter, we see a sequential decrease in the low single digit percentage range for Pnc's NII in Swiss francs, which translates to a sequential mid single digit percentage increase in U S. Dollar terms based on current FX rates.

Todd Tuckner: dollar terms based on current FX rates. The outlook is driven by last month's S&B 25 basis point rate cut, despite day count helping, and the latest change to the S&B's threshold factor for remunerating site deposits. For full year 2025, we continue to expect an NII decline of around 10% versus 2024 in Swiss francs, translating to a more modest reduction on a U.S. dollar basis. Credit loss expense was $48 million, an 8 basis point cost of risk on an average loan portfolio of $245 billion. This included Stage 3 charges of $54 million, again predominantly from Credit Suisse Exposures.

Todd: The outlook is driven by last month's SNB 25 basis point rate cut despite day count, helping and the latest change to the Smbs threshold factor for Remunerating sight deposits.

Todd: For full year 2025, we continue to expect an NII decline of around 10% versus 2024, and Swiss francs translating to a more modest reduction on a us dollar basis.

Todd: Credit loss expense was 48 million, an eight basis point cost of risk on an average loan portfolio of 245 billion. This.

Todd: This included stage III charges of 54 million again predominantly from credit Suisse exposures.

Todd Tuckner: Reflecting on Developing Macroeconomic Events. We currently assess that exposures to our more tariff exposed corporate clients within our Swiss credit book are well contained. On this basis, for full year 2025, we continue to expect PNC's CLE to be around $350 million. This said, we're closely monitoring U.S. trade policy developments and their first and second order impacts on our Swiss loan exposures, thereby intending to update our credit loss expectations and allowances as and when appropriate.

Todd: Reflecting on developing macro economic events, we currently assess that exposures to a more tariff exposed corporate clients within our Swiss credit book are well contained.

Todd: On this basis for full year 2025, we continue to expect Pnc's cle to be around $350 million.

Todd: This said, we're closely monitoring U S trade policy developments in their first and second order impacts on our Swiss loan exposures, thereby intending to update our credit loss expectations at allowances as and when appropriate.

Todd Tuckner: P&C's operating expenses in the quarter were $1.1 billion, down 4%.

Todd: Pnc's operating expenses in the quarter were $1 1 billion down 4%.

Todd Tuckner: Moving to slide 12. Asset management drove a pre-tax profit of $208 million, up 15% year-on-year, with disciplined cost management more than compensating for lower revenue. Net management fees declined by 4% as the effect of higher average invested assets was more than offset by margin compression from clients having rotated into lower margin products over recent periods. This said, we're gaining traction in delivering differentiated and higher margin products, including in our Credit Investments Group and in UGA, which saw strong net new commitments in the quarter and invested asset growth of 13% compared to a year ago. Performance fees were $30 million, in line with the prior year, and with higher revenues from our credit capability.

Todd: Moving to slide 12 asset management drove a pretax profit of $208 million up 15% year on year with disciplined cost management more than compensating for lower revenues.

Net management fees declined by 4% as the effect of higher average invested assets was more than offset by margin compression from clients, having rotated into lower margin products over recent periods.

Todd: This said, we're gaining traction and delivering differentiated and higher margin products, including in our credit investments group and in UGA, which saw strong net new commitments in the quarter and invested asset growth of 13% compared to a year ago.

Todd: Performance fees were $30 million in line with the prior year and with higher revenues from our credit capabilities.

Todd Tuckner: Net new money was positive $7 billion, with strong flows in money market and active fixed income, as well as sustained demand for SMAs, which saw inflows of $4.5 billion this quarter. Operating expenses were 10% lower as Asset Management retools for growth by continuing to make strong progress in streamlining its infrastructure and operating models.

Todd: Net new money was positive 7 billion with strong flows in money market and active fixed income as well as sustained demand for SMA, which saw inflows of $4 5 billion this quarter.

Todd: Operating expenses were 10% lower.

Todd: Asset management Retools for growth by continuing to make strong progress in streamlining its infrastructure and operating model.

Todd Tuckner: On to slide 13 and the investment bank. In the IB, we delivered pre-tax profit of $696 million, up 72%, and a return on attributed equity of 16%, all while absorbing incremental RWA from the implementation of the final Basel III FRTB Revenues increased by 24% to $3 billion, driven by global markets, which posted its best quarter on record. Banking revenues decreased by 4% to $564 million, broadly in line with the fee pool. while the market environment weighed on our banking results across products and regions. And despite growing economic uncertainty, our pipeline continues to build. We remained top 10 in announced M&A and saw continued momentum in our mandated deal book.

Todd: Onto slide 13 in the investment bank.

Todd: In the IV, we delivered pretax profit of $696 million up 72% and a return on attributed equity of 16% all while absorbing incremental <unk> from the implementation of the final Basel III Fr T V rules.

Todd: Revenues increased by 24% to 3 billion driven by global markets, which posted its best quarter on record.

Todd: Banking revenues decreased by 4% to $564 million.

Todd: <unk> in line with the fee pool.

Todd: While the market environment weighed on our banking results across products and regions and despite growing economic uncertainty our pipeline continues to build.

Todd: We remain top 10 in announced M&A and saw continued momentum in our mandated deal book.

Todd Tuckner: In advisory, top line growth was 17% while capital markets revenues declined by 13% mainly due to softer sponsor activity. In the Americas, the mix within the LCM fee pool shifted towards corporates and away from sponsors. where we're more concentrated. In ECM, although the 1% revenue decrease outperformed the fee pool, we remain focused on our pipeline build, which is expected to yield meaningful returns over the medium term. Regionally, AIPAC grew its overall banking revenues by over 70% compared to the prior year quarter and delivered its best first quarter on record in M&A. Revenues and markets increased by 32% to $2.5 billion.

Todd: In advisory topline growth was 17% while capital markets revenues declined by 13%, mainly due to softer sponsor activity in the Americas the mix within the LCM fee pool shifted towards corporates and away from sponsors where we're more concentrated.

Todd: In ECM, although the 1% revenue decrease outperformed the fee pool, we remain focused on our pipeline build which is expected to yield meaningful returns over the medium term.

Todd: Regionally APAC grew its overall banking revenues by over 70% compared to the prior year quarter and delivered its best first quarter on record in M&A.

Todd: Revenues in markets increased by 32% to $2 5 billion.

Todd Tuckner: Against the market backdrop of elevated activity and volatility in equities and FX, where our idea is more concentrated, we capitalized on the enhanced capabilities acquired with Credit Suisse and our multi-year investments in technology. We saw increases across all regions, with the Americas, APAC, and Switzerland each delivering their best quarterly performance on record. Equities revenues reached a new high driven by equity derivatives with increases across all regions and supported by cash equities and prime brokers. FRC increased by 27% primarily driven by FACT. Operating expenses rose by 14%, largely reflecting increases in personnel expenses.

Todd: Against the market backdrop of elevated activity and volatility in equities and FX, where our IV is more concentrated we capitalized on the enhanced capabilities acquired with credit Suisse, and our multi year investments in technology.

Todd: We saw increases across all regions with the Americas, APAC and Switzerland, each delivering their best quarterly performance on record.

Todd: Equities revenues reached a new high driven by equity derivatives with increases across all regions and supported by cash equities and prime brokerage.

Todd: FRC increased by 27% primarily driven by FX.

Todd: Operating expenses rose by 14% largely reflecting increases in personnel expenses.

Todd Tuckner: On slide 14, Noncore and Legacy's pre-tax loss was $200 million, with $284 million in revenue. Funding costs of around $130 million were more than offset by revenues from position exits, particularly in structured products. This included the expected gain of around $100 million from closing the sale of Credit Suisse's U.S. mortgage servicing company announced last year, which also eliminates run rate costs of around $100 million per annum. Operating expenses were down 38% year-on-year and 12% sequentially, as NCL continues to make excellent progress in driving out costs. For the remainder of the year, we expect NCL to generate an underlying pre-tax loss, excluding litigation, of around $1.7 billion, including revenues of around $-300 million, mainly from funding costs.

Todd: On slide 14, non core and legacy pre tax loss was $200 million with $284 million in revenues fund.

Todd: <unk> funding cost of around $130 million were more than offset by revenues from position exits, particularly in structured products.

Todd: This included the expected gain of around $100 million from closing the sale of credit Suisse's U S mortgage servicing company announced last year, which also eliminates run rate costs of around 100 million per annum.

Todd: Operating.

Todd: Expenses were down 38% year on year, and 12% sequentially as NCL continues to make excellent progress in driving out costs for.

Todd: For the remainder of the year, we expect NCL to generate an underlying pretax loss, excluding litigation of around $1 7 billion, including revenues of around negative 300 million mainly from funding costs.

Todd Tuckner: Revenues from carry, continued exits, and remaining fair value positions are expected to net around zero, and underlying operating expenses should average around $450 million per quarter. While the current environment may slow the pace of exits, it is unlikely to materially affect the financial performance of our NCL portfolio. As examples, hedges in the macro book and the nature of our now much smaller credit Render the valuation of both portfolios less susceptible to market volatility.

Todd: Revenues from Carey continued exits and remaining fair value positions are expected to net around zero and underlying operating expenses should average around $450 million per quarter.

Todd: While the current environment may slow the pace of exits it is unlikely to materially affect the financial performance of our NCL portfolio.

Todd: As examples hedges in the macro book and the nature of our now much smaller credit book.

Todd: Under the valuation of both portfolios less susceptible to market volatility.

Todd Tuckner: Now on to slide 15. Since the second quarter of 2023, Noncore and Legacy has freed up almost $7 billion of capital, reduced its cost base by over 60%, and closed 74% of the 14,000 books they started with. As of the end of March, risk-weighted assets in NCL were $7 billion lower than in the prior quarter, as position exits across securitized products, credit, and macro more than offset the inflationary effects of the final Basel III standard.

Todd: Now on to slide 15.

Todd: Since the second quarter of 2023, non core and legacy is freed up almost $7 billion of capital reduced its cost base by over 60% and closed 74% of the 14000 books they started with.

Todd: As of the end of March risk weighted assets in NCL was $7 billion lower than in the prior quarter as position exits across securitized products credit and macro more than offset the inflationary effects of the final Basel III standards.

Todd Tuckner: Again this quarter, the skillful expertise of the NCL team has kept us well ahead of our de-risking schedule. Given this accelerated progress, we're upgrading our ambitions and now aim to drive NCL's credit and market risk RWA below $8 billion by the end of 2025 and to around $4 billion by the end of 2026. While we expect the reduction in balance sheet to continue to contribute to NCL's cost performance.

Todd: Again this quarter the skillful expertise of the NCL team has kept us well ahead of our Derisking schedule.

Todd: Given this accelerated progress we're upgrading our ambitions and now aim to drive Ncl's credit and market risk <unk> below $8 billion by the end of 2025 and to around $4 billion by the end of 2026.

Todd: While we expect the reduction in balance sheet to continue to contribute to npls cost performance.

Todd Tuckner: As I've highlighted in the past, further savings from technology, real estate, and resolving ongoing litigation matters will take longer to achieve. This underpins our 2026 exit rate cost guidance I offered last quarter.

Todd: As I've highlighted in the past further savings from technology real estate and resolving ongoing litigation matters will take longer to achieve.

This underpins our 2026 exit rate cost guidance I offered last quarter.

Operator: With that, let's open for questions. The conference will begin shortly. Thank you.

Todd: With that let's open for questions.

Todd: [noise] conference will begin shortly.

Operator: 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 1 at this time.

Todd: We will now begin the question and answer session for analysts and investors participants are requested to use only handsets when asking a question anyone who has a question press star one at this time.

Jeremy Sigee: The first question comes from Jeremy Sigee from BNP. Please go ahead. Morning, thanks very much.

Todd: The first question comes from Jeremy <unk> from BNP. Please go ahead.

Jeremy: Good morning, Thanks very much.

Sergio Ermotti: Firstly, just a basic one, the fact that you're accruing the whole of the 2025 share buyback suggests that you intend to do that almost regardless of what the draft rules look like when they're published in June. Is that a fair interpretation?

Jeremy: Firstly, just a basic one the fact that you're accruing the whole of 2025 share buyback suggests that you intend to do that almost regardless of what the draft rules look like when the published in June is that a is that a fair interpretation.

Sergio Ermotti: And then my second question is a bit broader. Could you talk about how your wealth management clients in different regions are reacting in April, post the tariffs in the US? Are they doing more with the bank or less with the bank? What are their risk appetites? If you could talk about that, that would be great.

Jeremy: And then my second question is a bit broader could you talk about how your wealth management clients in different regions are reacting in April.

Jeremy: Post the tariffs in the U S are they doing more with the bank or less with the bank what are their risk appetite. So if you could talk about that that would be great. Thank you.

Sergio Ermotti: Thank you. Thank you, Jeremy. Not it's not a fair representation, considering what I say that, you know, our language hasn't changed. We say very clearly that, you know, we are accruing based on what we know, and we see today based on our strong performance based on our strong capital position, but of course, all of this is subject to us continuing to develop well in terms of financial targets, the integration, and as we pointed out, any material and immediate change in the regulatory regime. So in respect of the activity in April, I can only say that, of course, we had a, as I mentioned in my remarks, we saw a huge spike in client activity and volatility in the first couple of weeks, in the first few days of April, so even achieving a 30% increase compared to the peak of COVID times, which is quite exceptional.

Jeremy: Thank you Jeremy not is not a fair representation.

Jeremy: What I say, that's at our language absent change that we say very clearly that we are accruing at based on what we know and we see today based on our strong performance based on our.

Jeremy: Our strong capital position that set of.

Jeremy: Of course.

Jeremy: All of this is subject to us continuing to develop well in terms of financial targets the integration and as we pointed out.

Jeremy: Any material and immediate change in the regulatory regime.

Jeremy: So in respect of that the activity in April I can already say that of course, we had a as I mentioned in my remarks.

Jeremy: We saw a huge spike in that in client activity and volatility in the first couple of weeks in the first few days of April.

Jeremy: Even achieving a 30% increase compared to the peak of Calvert times, which is quite exceptional.

Sergio Ermotti: But it's fair to say that if you look at the last 10 days or so, there is a fatigue, you know, coming in. You see it also in financial markets. I think that markets are stabilizing around current levels, across many asset classes, and it's much more of a wait and see attitude. And so in that sense, you know, it's a more normalized environment.

Jeremy: It's fair to say that if you look at the last 10 days or so there is a fatigue.

Jeremy: Coming in and you'll see it also in financial markets. I think that's a mark is are stabilizing around current levels across many asset classes and that.

Jeremy: It's much more of a wait and see attitude than that so in that sense.

Jeremy: It is a more normalized environment.

Sergio Ermotti: Thank you.

Jeremy: Thank you.

Giulia Miotto: The next question comes from Giulia Miotto from Morgan Stanley. Please go ahead. Yes, hi, good morning. Thank you for taking my question. So the first one. I was surprised to hear that there is re-leveraging in Asia. That's quite a positive development.

Jeremy: The next question comes from Julian <unk> from Morgan Stanley. Please go ahead.

Julian: Yes, hi, good morning. Thank you for taking my question. So the first one.

Jeremy: I was surprised to hear that.

Julian: King in Asia.

Jeremy: This is quite a positive development.

Giulia Miotto: And I was wondering if that has carried through also in April or was it only a Q1 phenomenon and then, you know, got shut down by the tariff. And then the second question instead, of course, I have to ask on capital, May is the next catalyst there, or at least we will learn something there. Is there any development that you can share with us in terms of what to expect, what will go under government ordinance, what will be put to Parliament? Yes, any updated thoughts would be helpful. Thank you.

Jeremy: And I was wondering if that has carried through also in April.

Jeremy: Was it only.

Jeremy: In Q1.

Jeremy: The phenomenon and then got shut down by the tariff discussion.

Jeremy: And then the second question is bad.

Jeremy: Of course, I have to ask them.

Jeremy: Capital Me is the next.

Jeremy: Catalyst to that or at least we were.

Darrin is something there and is there any development that you can share with us in terms of.

Speaker Change: What to expect.

We'll go on the government or the knows what will be put to parliament.

Speaker Change: Yes, any any updated thoughts would be helpful. Thank you.

Sergio Ermotti: We will pick up the second one and Todd will pick up the first questions. There are no developments other than the updated timeline for the announcement of the proposals that are now seen, are going to now come in during the first week of June. So we don't know what's the content of this proposal in terms of also if there is any split between ordinance or legislative process. So. We are on a wait-and-see, and we will see, like everybody. five to six weeks time.

Speaker Change: They pick up the second one and Todd will pick up the first questions. There are no developments other than the update.

Todd: It's a timeline for the announcements of some of the proposals that are now as seen.

Speaker Change: Are gonna outcome in India during.

Speaker Change: During the first week of June So we don't know what the content of this proposal.

Speaker Change: In terms of Oh.

Speaker Change: Also if there is any split between ordinance or legislative process. So.

Speaker Change: We are in a wait and see and we will see like everybody six five to six weeks time.

Todd Tuckner: Giulia, I'd say it's helpful to step back and look at the bigger picture here on the lending question. I mean, clearly, for GWM, one of our strategic imperatives is to grow lending, albeit selectively and profitably, and as a driver of enhanced relationship revenues for clients. So we're pleased with the developments that we saw in 1Q. I mean, we can't speculate on where things are going to move, you know, given the current environment, for sure. But we're pleased with the 1Q performance, and that still remains a strategic focus for us. Thank you.

Speaker Change: Julia.

Julia: I'd say it is helpful to step back and look at the bigger picture here on the lending question I mean clearly for.

Speaker Change: For Gws.

Speaker Change: One of our strategic imperatives is to grow lending, albeit selectively and profitably and as and as a driver of enhanced relationship revenues for clients. So we're pleased with the developments that we saw <unk> I mean, we we can't.

Speaker Change: Speculate on on where things are going to move you know given the current environment for sure but.

Speaker Change: We're pleased with.

Speaker Change: The <unk> performance and that still remains a strategic focus for us.

Speaker Change: Thank you.

Kian Abouhossein: The next question comes from Kian Abouhossein from J.P. Morgan. Please go ahead. Yes, thanks for taking my questions. I wanted to come back to US wealth management. If you could maybe run, you clearly have done some strategic changes around the U.S. wealth management business, both on compensation, but also incentives, etc. And if I look on a year-end basis versus now, you have reductions in advisors. I just wanted to see where should we think advisor numbers to go to in U.S. wealth, and how should we think around the net new flows, but also impact in that respect, because you made some statements in the last quarter that could be a deterioration, but also in terms of improvement and pre-tax margin.

Speaker Change: The next question from comes from Kian <unk> from Jpmorgan. Please go ahead.

Speaker Change: Yes, thanks for taking my questions.

Speaker Change: I wanted to come back to U S wealth management.

If you could maybe Ron you clearly have done some strategic changes around the U S wealth management business both on compensation.

Speaker Change: Also incentives et cetera.

Speaker Change: If I look on a year end basis with US now you have reductions in advisers I just wanted to see.

Speaker Change: You think adviser numbers to go to.

Speaker Change: In U S wells and how should we think around the.

Speaker Change: <unk>.

Speaker Change: Net new flows, but also impact in that respect because you made some statements in the last quarter that could be a deterioration.

Speaker Change: But also in terms of improvement in pre tax margin, so a little bit more of a holistic approach around the changes that you've done and the impact and then secondly, just coming.

Kian Abouhossein: So a bit more of a holistic approach around the changes that you've done and the impact.

Sergio Ermotti: And then secondly, just coming back to the Federal Council report, can you just take a step back and just give your current views around your positioning against other banks, but also potential offsets that you can think about in order to offset some kind of additional capital requirement, even in big picture terms, if you could talk about that? Hey, Kian. So on on the wealth one, let's zoom, let's zoom out a bit. And just reiterate that we're executing at pace on our on our plans and our strategy. You know, clearly, quarter on quarter, we could see volatility.

Speaker Change: Back to the.

Speaker Change: Federal Council report.

Speaker Change: Can you just can we just take a step back and just give you a current.

Speaker Change: US around your positioning.

Again other banks, but also potential offsets that you can think about in.

Speaker Change: In order to offset some kind of additional capital requirement even in big picture terms, if you could talk about that.

Speaker Change: He can so on the on the.

Speaker Change: Wealth, one, let's assume let's zoom out a bit.

Speaker Change: And just reiterate that we're executing at pace on our on our plans and our strategy.

Speaker Change: You know clearly quarter on quarter, we could see.

Sergio Ermotti: But this said, you know, we're looking at our ambition to achieve, as you know, a structural midterm, mid-team pre-tax margin. And we look at that as a two to three year journey. You know, as we zoom in, you know, the question on really our platforms and advisors, you know, first, I'd say our platform is is stable. There's been broad support for our strategy, which, you know, is intended to better align advisor incentives with the strategic goals of the firm. That's in in the first quarter. You know, in terms of the in terms of the headcount, I would just say that our recruiting pipeline is robust.

Speaker Change: Volatility, but this said you know we're looking at our ambition to achieve as you know a structural midterm mid teen pre tax margin.

Speaker Change: And we look at that as a two to three year journey.

Speaker Change: Sure.

Speaker Change: As we zoom in.

Speaker Change: You know the question on our really our platforms in and advisors first I'd say our platform is stable there's been broad support for our strategy.

Speaker Change: Which is intended to better align.

Speaker Change: Advisor incentives with our strategic goals of the firm that's evidenced by this by the very strong same store net new money, we've seen perhaps the strongest net new money, we've seen over many quarters in the first quarter.

Speaker Change: In terms of the in terms of the head count I would just say that our recruiting pipeline is robust there is some attrition that one can expect and in fact, we were observing across the industry given the market dynamics of 'twenty 'twenty four versus the beginning of 'twenty five and the outlook.

Sergio Ermotti: There is some attrition that one can expect. And in fact, we're observing across the industry, given the market dynamics of 2024 versus the beginning of 25. And the outlook that, you know, would create some movement across the industry in terms of advisory positioning, but nothing I would I would highlight in in our own in our own platform.

Speaker Change: That would create.

Speaker Change: Some movement across the industry in terms of.

Speaker Change: Advisor repositioning, but nothing I would I would highlight in our in our own and our own platform.

Sergio Ermotti: Kian, before I answer the question, can you specify what you mean by positioning versus other banks? Yeah, Sergio, I left it open on purpose, just to see, leaving the floor open to some extent, see what, yeah, what you can, what you can tell us and your thoughts about it, because it is clearly a very open question. It's very difficult for us to look through it as well.

Ken: Ken before I answer the question can you.

Specify what do you mean by positioning versus other banks.

Andy: Yes, Andy I left it open on purpose.

Speaker Change: He is leaving the floor open to some extent.

Andy: Okay.

Andy: Yes, what you can what you can tell us in your thoughts about it because it is clearly a very open question. It is very difficult.

Sergio Ermotti: The call is scheduled to end at 10, 11, 15, so I'm not, no, sorry, at 10.30, so I'm not so sure I have so much time to go through that. So, but, so the issue, the issue is very clear that when I look at the regulatory framework in Switzerland, it's one of the most demanding, and particularly after we fully implemented the Basel III, I think that, you know, you know, Unknown Shareholder, Alastair Ryan, Andrew Coombs, Benjamin Goy, Antonio Reinen, Todd As we always say, we are not only competing in terms of return on capital, but we are also competing for capital.

Andy: Okay.

Andy: The call is scheduled to end.

Andy: And at a 10.

Andy: <unk> I'm sorry.

Andy: So I am not so sure I have so much time to go through that so.

Andy: But yeah.

Andy: So the issue the issue is.

Andy: Very clear that when I look at the regulatory.

Andy: Our framework in Switzerland is one of the most demanding and.

Andy: Particularly after we fully implemented Basel III I think.

Andy: You know.

Andy: In terms of fat a relative game that we are comfortable that we have a strong and demanding a regime that Kathy.

Andy: Capital strength is that he is one of our key pillars, having say that sac.

Andy: We all know that's at a you know there is a point in time in which to March is not necessarily.

Andy: Positive and therefore, you know that's the only consideration I can say when we speak about the relative back at terms. So because at the end of the day as we always say we are not only competing in terms of return on capital, but we are also competing for capital.

Sergio Ermotti: And therefore, having a, you know, an attractive, sustainable business that also delivers appropriate returns is a key element on judging and balancing any regulatory That's what I can say. So in respect of set of measures, you know, the set of measures can only be decided and analyzed when you know what is the outcome. And so we will need to assess exactly what the proposal is, in terms of impact and timing.

Andy: And therefore, having a you know an attractive first sustainable business that also are believers.

Andy: Opiate returns is a key element on judging and balancing any regulatory regime. That's what I can say so in respect of fast set of measures.

Andy: Set of measures can only be.

Andy: Decided and analyze when you know what is the outcome and so we will need to assess exactly what the proposal is in terms of impact and timing.

Sergio Ermotti: And Sergio, just very quickly, do you expect enough clarity to assess with that report? I hope. I don't expect. Okay, thank you.

Speaker Change: And so if you just very quickly do you expect enough clarity to assess is that report.

Andy: I hope I don't expect.

Speaker Change: Okay. Thank you.

Stephan Stallman: The next question comes from Stephan Stallman from Autonomous. Please go ahead. Good morning. Thank you very much for taking my questions. I have two on capital, please. The first one on the parent bank, the fully loaded CT1 ratio was, I think, down by about 60 basis points during the quarter. Was there anything particular to highlight that happened during the quarter? And the second one, a bit more, let's say, strategic, the risk density in the group has actually come down quite a bit. It's now a bit below 31%. And I think the hope was always in a way that bottle four would kind of lift this risk density towards 35%, where it doesn't matter anymore whether leverage or risk weighted assets drive your capital requirements.

Stefan: The next question comes from Stefan <unk> from Autonomous. Please go ahead.

Speaker Change: Hey, good morning, Thank you very much for taking my questions I have.

Speaker Change: Two on capital. Please the first one on the apparent Bang the fully loaded CET. One ratio was I think down by about 60 basis points. During the quarter was there anything particular to highlight.

Speaker Change: During the quarter and.

Speaker Change: And the second one a bit more strategic.

Speaker Change: The risk density.

Lee: The group Thanks Lee.

Lee: Come down a bit in snow a bit below 31% and I think the hope was always in a way that positive for what kind of lift this risk density towards 35%.

Yes.

Lee: It doesn't make it any more with a liberal risk weighted assets driving capital requirements, but now it's 31 it looks like you.

Stephan Stallman: But now at 31, it looks like you're quite deeply constrained by leverage, not risk weighted assets going forward. Do you expect this to change at all, from what you can see? And if not, does it have any impact on the way that you run your capital management going forward? Thanks.

Lee: Quite deeply constrained by.

Lee: <unk> not risk weighted assets going forward do you expect this to change at all from what you can see in this launch.

Lee: <unk> launched does it have any impact on the way that you run your capital management going forward.

Todd Tuckner: Thanks, Stefan, for those questions. Appreciate you bringing those up. So on first on the capital, the parent bank quarter on quarter reduction, as I mentioned in my comments, you know, comes from the accrual of a dividend that we expect to pay in 26 in relation to 2025 overall earnings of the parent bank. So it's a dividend accrual that effectively drove the capital ratio within our within our guidance. On the second one, you know, it's a very good spot on your point about risk density coming in. You know, I would say you're also right where I would say more constrained by leverage than risk weighting.

Lee: Thanks, Thanks, Stephan for those questions. Appreciate you, bringing those up so on on the first on the capital that the parent bank a quarter on quarter reduction as I mentioned in my comments comes from the accrual of a dividend.

Lee: That we expect to pay <unk> 26 in relation to 2025.

Lee: Overall earnings of the parent bank, so it's a dividend accrual.

Lee: That.

Lee: Effectively drove the capital ratio within our within.

Lee: Within our guidance.

Lee: On the on the second one you know it's a very good spot on your point about risk density coming in you know I would say.

Lee: Youre also right, where I would say more constrained by leverage than than risk weighting, but remember that we set our.

Todd Tuckner: But remember that we set our CT1 capital ratio on, you know, on a risk-weighted as our key target. So, in that sense, that becomes for us, you know, binding unless truly leverage becomes binding. But to answer your question about what you can do about it or what the cause was or is, you know, I would say that you see how we've been able to really drive down RWA, you know, because of the technical nature of it and the way we've been able to, you know, manage down work, you know, also work to get approvals on models, on methodology, on data quality, on all the issues.

Lee: Our our CET one.

Lee: Capital ratio on a risk weighted basis as our key targets. So in that sense that becomes for us by.

Lee: Finding a less truly leverage becomes binding but to answer your question about what you can do about it or what the cause was or is.

Lee: I'd say that you see how we've been able to really drive down our WMA.

Lee: Because because of the technical nature of it and the way we've been able to manage down.

Lee:

Lee: <unk> also worked to get approvals on models on methodology on data quality on all the on all the issues.

Todd Tuckner: coverage of external ratings, all the things that have helped us drive down. I think the leverage ratio, unfortunately, is just, you know, more, more simple, less fertile ground for optimization. And so you saw, as I commented, you know, that we had the SACR increase, whereas on RWA, we had, you know, more fertile ground to optimize. So I think your observation is correct. But I don't see at this time, you know, given we we intend to operate with a CET1 capital ratio of around 14%, which for us is binding, even though you're right, leverage is, you know, we have less cushion on the leverage side than we do on the risk weighted side.

Lee: Coverage of external ratings at.

Lee: All the things that have helped us drive down I think the leverage ratio. Unfortunately is just you know more more simple less fertile ground for optimization and so you saw as I commented that we had the soccer and increase.

Lee: Whereas on the <unk> we had.

Lee: More fertile ground to to optimize so I think your observation is correct.

Lee: But I don't see at this time, given we intend to operate with a CET one capital ratio of around 14%, which for us is binding.

Lee: Even though you're right our leverage.

Lee: As we have less cushion on the leverage side than we do on the risk weighted side.

Todd Tuckner: You know, going, nothing is changing as we move forward. That's, that's the way we're thinking about it.

Lee: Nothing is changing as we move forward. That's that's the way we're thinking about it.

Benjamin Goy: Okay, thank you very much. The next question comes from Benjamin Goy from Deutsche Bank. Please go ahead.

Lee: Okay. Thank you very much.

Speaker Change: The next question comes from Benjamin Goy from Deutsche Bank. Please go ahead.

Benjamin Goy: Good morning, two questions, please, from Life Connected Stores. Your India partnership maybe can come a bit more broader on the onshore dynamics we should expect in emerging markets going forward is even a large market like India. And you have to do a partnership.

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

Speaker Change: Hum.

Speaker Change: So maybe you can comment a bit more broader on the onshore.

Speaker Change: You should expect an emerging market going forward.

Speaker Change: Yeah.

Speaker Change: You have to do a partnership.

Benjamin Goy: And then secondly, markets are now pricing in, again, negative rates in Switzerland. Just wondering, short term, any impact or Below zero, there is not much of an incremental negative impact. The longer term question is the 50% cost-to-income ratio targeted in use with business. I assume done or based on the product industry, I would look on how you intend to achieve that or do you look more on the cost side.

Speaker Change: The market pricing and again negative rates in Switzerland, just wondering short term any impact or.

Speaker Change: Below zero.

Speaker Change: Much incremental negative impact with a longer term question is 60% cost income ratio target.

Matt: Thank you Matt.

Speaker Change: Almost I assume.

Speaker Change: Based on my part.

Speaker Change: To achieve that.

Speaker Change: Good morning.

Sergio Ermotti: Thank you. Benjamin, let me address the second question. So, on your observation regarding the market pricing and negative rates, you know, as we indicate in our interest rate sensitivity, and as I've commented before, we certainly see convexity in the movement of rates either down or up in the sense that whether rates move into negative territory or move up, that would be to our net interest income in our PNC business. So, in that sense, you know, to the extent that is priced in and to the extent that actually happens, you know, we see upside in our NII.

Speaker Change: Awesome.

Speaker Change: Benjamin Let me address the second question.

Speaker Change: So.

Speaker Change: On your observation regarding the market pricing and negative rates you know as we indicated in our interest rate sensitivity and is it as.

Speaker Change: As I've commented before we certainly see convexity and the movement of <unk>.

Speaker Change: <unk>, either down or up in the sense that whether rates move into negative territory or move up.

Speaker Change: That would be accretive to our net interest income in our in our P&C business.

Speaker Change: So in that sense.

Speaker Change: To the extent that is priced in and to the extent that actually happens we see upside in in in our NII.

Sergio Ermotti: You asked about the expectation on the cost-income ratio targets that we have by the end of 2026. I would say it's, you know, we continue to execute against that expectation. That is our expectation at this stage, not changing that, you know, given interest rate expectations at this point in time.

Speaker Change: You asked about the expectation on the cost income ratio targets that we have by the end of 2026, I would say, it's where we continue to execute against that that expectation that is our expectation at this stage not changing that.

Speaker Change: Given given interest rate expectations at this point in time.

Sergio Ermotti: Sony. Yeah. You know, I think that we see a secular trend developing for the Indian market domestically and, but also at the same time, we see also an opportunity for India residents booking a business outside. And looking at our current setup, we thought that and we decided that the best way to pursue the next phase of growth and growth opportunities in India for us was to partner with the only fully independent asset gatherer in India. And, and so through that, you know, through the combination of us buying a stake, but also, you know, bringing our current business into a 360, we can now, we can now leverage for the future.

Speaker Change: So on India.

Speaker Change: I think that we see a secular trend developing for being the end market that domestically in that but also at the same time, we see also an opportunity for them.

Speaker Change: India residents are looking at business outside and.

Speaker Change: And looking at our current setup that we thought would that then we decided that the best way to pursue.

Speaker Change: The next phase of growth and growth opportunities in India for US was to partner with the only fully independent asset gatherer in India.

Speaker Change: And so through that through the combination of fast buying a stake but also oh.

Speaker Change: Bringing our current <unk> business into <unk> at 360 weekend now Oh, we can now leverage it for the future. So.

Sergio Ermotti: So we see very good prospects across the board. In terms of not only sharing our best practice globally, but also learning on on the domestic market. And, you know, we'll, we'll take it from there. So I think that, you know, we are very optimistic about the long term potential growth in India.

Speaker Change: We see very good prospects across the board.

Speaker Change: In terms of fat not only sharing.

Speaker Change: Our best practice globally, but also learning on the domestic markets.

Speaker Change: And as.

Speaker Change: We will take it from there so I think that's a.

Speaker Change: We are very optimistic about that.

Speaker Change: The long term potential lag growth in India.

Speaker Change: Thank you.

Amit Goel: The next question comes from Goel Amit from Mediobanca, please go ahead. Hi, thank you. And maybe just more of a follow up question, but just The remarks earlier about the equity double leverage and kind of looking to get down to the 110% at Q2 and then you know continue to bring it back to pre-acquisition levels in the quarters after. I'm still kind of curious why, you know, what drives the pace of that and, and kind of what's the cost or what's the consequence if you were to stay at 110%? because, you know, let's say if the group were to have less leverage at the parent bank level, What would stop the group having a bit more leverage at the group and what would be the consequence or what is the benefit of bringing that down from 110 to say 105 or 100?

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

Speaker Change: Hi, Thank you and then maybe just more of a follow up question, but just then.

Speaker Change: The remarks earlier about the double leverage and and kind of looking to get down to the 110% a key team.

Speaker Change: And then continue to bring it back to pre acquisition levels in the quarters out there.

Speaker Change: I'm still kind of curious why and.

Speaker Change: What drives the pace.

Speaker Change: All of that and.

Speaker Change: And kind of what's the cost what's the consequence, if you were to stay at 110%.

Speaker Change: Because let's say integrate glad to have.

Speaker Change: And less leverage at the parent level.

Speaker Change: What would stop the group, having a bit more leverage at the group.

Speaker Change: And you know what would be the constraint. So what is the benefit of bringing that down from one tenant to say 1854.

Speaker Change: 100, and then.

Amit Goel: And so that's the question there.

Speaker Change: So that's the question that.

Todd Tuckner: And then just on the... PCB Business. Again, I appreciate the response on different rates, for example, if they were to go negative, etc, the convexity. Just wondering what you're thinking about volumes there, given the exchange rate movement. Thank you. Thanks, Amit. So on the first, your question in terms of the consequence of a higher one or the benefit of a lower one, you know, for sure, the way we look at it is a lower one, which is to say our pre-acquisition levels, the way we've historically operated. One is more prudent. It's in line with our strategy.

Speaker Change: And then just on the.

Speaker Change: PCB business again I appreciate the respondents on and different rates for example, lets say lets go negative accenture that connects T.

Speaker Change: Just wondering what you're thinking about volume is that given the.

Speaker Change: Exchange rate Nathan.

Speaker Change: Any kind of a thing.

Speaker Change: Helpful. Thank you.

Speaker Change: Thanks, Amit so on on the first.

Speaker Change: Your question in terms of the consequence of a higher one or the benefit of a low one for sure. The way we look at it as a lower one which is to say of our pre acquisition levels. The way. We've we've historically operated one is more prudent.

Speaker Change: It's in line with.

Todd Tuckner: And third, it just offers far more flexibility. So if you operate at a higher level and then you hit any stress, then, you know, you've effectively sold your buffer. And so that's the reason why it's prudent to operate at the levels that Sergio and I have been highlighting over the last quarter or two since, you know, I raised the topic last quarter. In terms of P&C volumes, as we look forward, I would say at this point, the outlook on lending is flattish for now in terms of volumes and ways that, you know, if that is a mitigant, you know, for sure, the balance sheet optimization that they've done, that the business has done on the asset side has driven profitability, return on attributed equity, revenue over RWA, accretion, appreciation.

Speaker Change: It's in line with our strategy and third it just offers far more flexibility. So if you operate at a higher level and then you hit any stress then you know your your.

Speaker Change: You you've effectively.

Speaker Change: Your buffer and so that's the reason why it's prudent to operate at the levels that are Sergio and I have been highlighting over the last quarter or two since.

Speaker Change: I raised the topic last last quarter.

Speaker Change: In terms of.

Speaker Change: P&C volumes as we look we look forward I would say at this point the outlook on lending is is flattish for now.

Speaker Change: In terms of volumes in ways that.

Speaker Change: You know if that is a mitigate you know for sure the balance sheet optimization that they've done.

Speaker Change: But the business is done on the asset side is driven profitability return on attributed equity Ah <unk>.

Speaker Change: Revenue over our WMA.

Speaker Change: Accretion appreciation.

Speaker Change: So.

Todd Tuckner: I would say that's the main focus on the lending side. Deposit outlook is also, you know, relatively flattish, maybe some short-term moderate down a bit, you know, in a very competitive market, and we're not chasing where we're seeing, you know, competitors buying deposits at much higher rates to protect their loan books. Our deposit outlook is stable, I would say, but again, there, you know, we have adjusted deposit pricing on select products to help, but at the end of the day, as I've said before, you know, certainly the biggest help would be rates either moving down or up from a sort of a zero perimeter, as that would really, you know, be the most accretive from an NII perspective in the long run.

Speaker Change: I would say that's the main focus on the on the lending side deposit outlook is also.

Speaker Change: You know relatively flattish, maybe some short term moderate down a bit.

Speaker Change: Are you now in a very competitive market and we're not chasing.

Speaker Change: Where we're seeing competitors buying deposits at much higher rates to protect their loan books. So our deposit outlook is stable I would say, but again there.

Speaker Change: We have adjusted deposit pricing on select products to.

Speaker Change: To help but.

Speaker Change: But at the end of the day as I've said before you know certainly the biggest help would be rates, either moving down or up from a sort of a zero.

Speaker Change: Perimeter.

Speaker Change: As that would really be the most accretive from a NII perspective in the P&C business.

Todd Tuckner: Thank you.

Speaker Change: Thank you.

Andrew Coombs: The next question comes from Andrew Coombs from CD. Please go ahead. Good morning. If I could have two follow-ups, please, one on capital and one on GWM, NII. On capital, coming all the way back to Jeremy's first question, you've taken a change in approach. You've fully accrued, filled the buyback rather than taking the capital impact as in when you execute. Can I just ask what was the rationale for doing this? And is this something you envisaged doing going forward as well? Your second question is on GWNNII. And I think at the full year results, you talked about Q1 being down low to mid single digit.

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

Andrew Coombs: Good morning, if I have two follow ups. Please one on capital one on gws.

Speaker Change: Hi.

Speaker Change: On capital coming our way back to Jeremy's question.

Speaker Change: Changing it right.

Speaker Change: Crude.

Speaker Change: Both the buyback.

Speaker Change: Rather than taking the capital impact hasn't when you execute.

Speaker Change: Can I just ask what was the rationale for doing the same thing.

Speaker Change: <unk> doing going forward as well.

Speaker Change: And second question GWA in NII.

Speaker Change: Thank you.

Speaker Change: <unk> full year results, you talked about Q1 being down low to.

Speaker Change: Mid single digits.

Andrew Coombs: sequentially you've ended up down 7% and you said that there was one percentage point of that was due to the re-segmentation but nonetheless it looked a little bit worse than your original guidance so perhaps you could explain why it came in slightly worse than you initially expected and then more broadly your full year guidance for GWMNII is unchanged but was previously predicated on the second half being flattish versus the first half and you now have seen a slight recovery in the second half. So thank you, Andrea.

Speaker Change: Sequentially you've ended up down.

Okay.

Speaker Change: One percentage point of that was due to the re segmentation.

Speaker Change: But nonetheless.

Speaker Change: Thank you.

Speaker Change: And perhaps you can explain why it came in slightly worse.

Speaker Change: Initially expected and.

Speaker Change: Then more broadly.

Speaker Change: Full year guidance with GW NII is unchanged.

Speaker Change: Previously granted Goldman second half being flattish capacity for the past half.

Speaker Change: You know Stephen a slight recovery in the second half.

Speaker Change: So thank you Andrea so on on capital again, I think that's a.

Sergio Ermotti: So on capital, again, I think that The main driver here is to also manage our ratio in respect of our guidance and by doing the accruals, we basically take it closer to our 14, around 14%. But most importantly, I think that the real factor that has changed is that we move from having an ambition to having an intention to. I mean, this is all still subject to the conditions we always set in terms of financial performance and also no material and immediate change in the regulatory framework. But it's clear that now we have, because of the results and the progress we are making in the integration and everything that we can control, we feel comfortable that this is the way to go.

Speaker Change: The main driver is to also manage our ratio in respect of our guidance and you know by by by doing the accruals. We we basically take it closer to our 14th around 14%, but most importantly, I think thats a real factor debts as change is that we moved from.

Speaker Change: Having an ambition to have an intention to I mean this is all still subject to the conditions, we always set in terms of financial performance and that.

Speaker Change: And also no material any immediate change in the regulatory.

Speaker Change: Our framework, but it's clear that now we have that because of the results and the progress we are making in the integration and everything that we can control we feel comfortable that this is the way to go. So you can always expect that as soon as we feel that.

Todd Tuckner: So you can always expect that as soon as we feel that there is a change between ambition and intention, also from an accounting standpoint of view, we will accrue in a prudent manner, which we believe is also more prudent, that kind of reserve that's in order to then execute on capital return plan. And Andrew, on the on the second question, yeah, the reason I gave some color on the segmentation change is, is just to explain the, you know, a bit of the delta. But, you know, with that, with that explained, you kind of get into the, into the mid single digit ranges, which is where we've, we guided into 1Q sequentially from 4Q.

Speaker Change: There is a change between ambition and intention and also from a accounting on a stand point of view we will.

Speaker Change: Our crew in a prudent manner, which we believe is also more prudent.

Speaker Change: It's kind of reserve our debts are in order to then execute on our capital return plans.

Andrew Coombs: And Andrew on the on the second question.

Andrew Coombs: Yeah. The reason I gave some color on the segmentation changes is just to explain the bit of the delta, but you know with that.

Andrew Coombs: With that explain you kind of get into the into the mid single digit range, which is where we've guided.

Andrew Coombs: Into <unk>.

Andrew Coombs: <unk> sequentially from <unk> in terms of the outlook going.

Todd Tuckner: In terms of the outlook going forward, you're right. I mean, I'm reaffirming the full year NII guidance for GWM. I see the loan outlook to be, again, dependent on the rate environment, but the loan outlook to be positive also dependent on the macroeconomic environment. But that right now, until we see any drastic change, the loan outlook has been has been accretive on on the NII in terms of the rest of the year for GWM. And also the deposit outlook is is is helping as well, again, subject to macroeconomic developments. But we also see some of the preferential FTD headwinds tapering.

Andrew Coombs: Forward you are right I mean, we're reaffirming the full year NII.

Andrew Coombs: NII guidance for GW, and I see the loan outlook could be.

Andrew Coombs: Again dependent on the rate environment, but the loan outlook to be positive also dependent on the.

Andrew Coombs: Macroeconomic environment, but that right now until.

Andrew Coombs: Until we see any drastic change the loan outlook has been it's been accretive on a on the NII and in terms of the rest of the year for GW M. And also the deposit outlook is helping as well again subject to.

Andrew Coombs: Macroeconomic developments, but we also see.

Andrew Coombs: Some of.

Andrew Coombs: The preferential F T D headwinds tapering and so ultimately you know this is contributing as well too.

Todd Tuckner: And so, you know, ultimately, you know, this is contributing as well to deposit margins increasing. So, for those reasons, I've kept the guidance stable for the full year. And as I said, offered the explain to sort of move into the into the Q1 guidance range. Right. Thank you both.

Deposit margins, increasing so for those reasons I have kept the guidance stable for the full year.

Andrew Coombs: And as I said offered the explain to sort of move into the into the Q1 guide.

Andrew Coombs: Our guidance range.

Andrew Coombs: Alright, thanks, guys.

Chris Hallam: The next question comes from Chris Hallam from Goldman Sachs. Please go ahead. Yeah, good morning, everybody. Thank you for taking my questions. You mentioned in the prepared remarks the LCMP pool shifted towards corporates and away from sponsors.

Speaker Change: The next question comes from Chris <unk> from Goldman Sachs. Please go ahead, yes. Good morning, everybody. Thank you for taking my questions. You mentioned in the prepared remarks, <unk> shifted towards corporate and away from sponsors any insights you can share on your discussions with the sponsor community more broadly how you expect them to act.

Sergio Ermotti: Any insights you can share on your discussions with the sponsor community more broadly, how you expect them to act in the coming quarters based on the operating backdrop we see today? And maybe at what point would you consider reassessing the banking revenue ambition for 2026? I guess in light of the slower activity levels year to date.

Speaker Change: In the coming quarters based on the operating backdrop, we see today and maybe at what point would you consider reassessing their banking revenue ambition for 2026, I guess in light of the slower activity levels year to date.

Sergio Ermotti: And then second, I just want to come back on this risk of an immediate and material change to the regulatory regime. So I appreciate the process is maybe less clear than it was. The range of outcomes is probably widened. But has the risk of immediacy also increased? It feels as though, if anything, you know, stuff's been pushed to the right a little bit. And obviously, there hopefully would be still some kind of phase in period, one would assume.

Speaker Change: And then second.

Speaker Change: Just wanted to come back on this risk of an immediate and material change to the regulatory regime. So I. Appreciate the processes is maybe less clear than it was the range of outcomes is probably widened but has the risk of immediacy also increased it feels as though if anything.

Speaker Change: Stuffs being pushed to the right a little bit and obviously that hopefully would be still some kind of phase in period, one would assume so just any thoughts on that.

Sergio Ermotti: So just any thoughts on that? Thank you. Well, look, I think that generally speaking, you know, it's on a year on year basis that the drop in the sponsor related activity was more important. But, you know, I would say that in general sponsors are also like everybody on a wait-and-see attitude. A lot of transactions are on hold. They are some extended new levels of funding and spread and credit markets may put some transaction at, you know, in question. But generally speaking, you know, the sense is that people are waiting to see if the situation clarifies in the next couple of months and then they're going to go into executing on plans for either add-on acquisitions or disposals, IPOs.

Speaker Change: Keith.

Keith: Well look I think that generally speaking.

Keith: On a year on year basis, they're up there in the sponsor related activity was at more and more.

Keith: Uh huh.

Keith: More importantly.

Keith: That's at I would say that in general the sponsors are also like everybody on a wait and see attitude that lots of transactions or on old they are.

Keith: Necessarily being that council of course, if you look at Sac to some extent the view levels of funding and spreads.

Keith: <unk>.

Keith: And credit Mark is May put some math transaction at.

Keith: No.

Keith: In <unk> question, but generally speaking yes.

Keith: The sense is that people are waiting to see if the situation clarifies in the next couple of months and then they go they're going to go into executing on.

Keith: Plans for either add on acquisitions or disposals ideals.

Sergio Ermotti: So I think that, you know, the most important issue that we see right now is that the pipeline of potential transactions is still healthy and building. So, we don't see a stop on that.

Keith: So I think that the.

Keith: The most important issue that we see right now is that the pipeline of potential transaction is still healthy and building up.

Keith: So we don't see a stop.

Keith: Stop on that so.

Sergio Ermotti: So, coming to your question, I think that's when we would change our outlook for over the cycle and ambitions on the top line is going to be when if we have a material change in the market conditions and in the prospect for the growth of banking businesses in the industry, our intention to be a relative winner out of it by gaining share of Wallet remains unchanged. So if we have to change our revenue assumptions, we're definitely not going to change our market share ambitions to improve and monetize on the investments we did on the platform in the last 24 months.

Keith: Coming to your question I think Thats, where.

Keith: When we would change our outlook for the over the cycle and ambitions on the topline is going to be when if we have a material change in the market conditions and in the prospect for them.

Keith: 444 for the growth of banking businesses in the industry, our intention to be a relative to that our winner out of Dubai.

Keith: <unk> share of wallet remains unchanged. So if we have to change our revenue assumptions.

Keith: We are definitely not going to change our market share ambitions to improve and monetize on the investments we need on the platform in the last 24 months.

Sergio Ermotti: In respect of the second one, I mean, look, it's just a prudent, we are not in control of this process, you know, we don't know what's coming out. And so we can't rule out anything in terms of the materiality of the change, and the timing. Therefore, it's, you have to, you have to interpret this language more as a prudent way to highlight that we are That's a possibility that doesn't necessarily reflect what we expect or don't expect. Okay, thanks, Sergio.

Keith: In respect of the second one I mean look it's just a prudent we are not in control of this process. We don't know what's coming out and so we can rule out anything in terms of upside the materiality of the change and the timing therefore, it's.

Keith: You have to you have to interpret that this language at more as a prudence at AR.

Keith: Way to highlight that we are that that's a possibility that doesn't necessarily reflect what we expect our dominance.

Speaker Change: Okay. Thanks, Andrew.

Piers Brown: The next question comes from Piers Brown from HSBC, please go ahead. Yeah, good morning. I've got two, one on FRC, so up 27% year-on-year, it's a much stronger print than a lot of your peers. And I'm just wondering, is that business mix related? You've mentioned the strength of FX. Or do you feel that you're still winning back market share in that business?

Piers Brown: The next question comes from Piers Brown from HSBC. Please go ahead.

Piers Brown: Yes, good morning, I've got two one on FRC.

Piers Brown: 27% year on year, it's much stronger prints on a lot of your peers and I'm. Just wondering is that business mix related you've mentioned the strength of FX.

Piers Brown: Or do you feel that you're still winning back.

Piers Brown: <unk> share in that business.

Piers Brown: And then the second question, sorry to come back on capital again, but you did say in the fourth quarter that you had further subsidiary repatriations potentially in the pipeline. I think you mentioned five billion from CSI and maybe something more coming out of the IHC. Can you give an update on progress on both of those fronts? Thanks. Hey Piers, so on the first question, the pickup in FRC year-on-year was driven by FX, where, you know, we're strong, concentrated. You know, we had, it was a difficult quarter, I think, for those that are more in rates and credit, and we're, as you know, under-concentrated there.

Piers Brown: And then the second question sorry to come back on capital again, but you did say in the fourth quarter that you had further.

Piers Brown: Subsidiary Repatriations potentially in the pipeline I think you mentioned $5 million from CSI, and maybe something more coming out of D. C.

Piers Brown: Can you give an update on.

Piers Brown: Progress.

Piers Brown: On both of those fronts.

Piers Brown: Okay.

Piers Brown: Hey, Pierre so on the first question.

Piers Brown: Yeah, the pick up in F. R see year on year was driven by FX, where we're strong concentrated we had it was a difficult quarter I think for those that are more in our rates and credit and where.

Piers Brown: As you know under concentrated there. So we didn't have that that impact. So we would bet. We benefited from where we were a well indexed in.

Todd Tuckner: So we didn't have that impact, so we benefited from where we were well-indexed in the FRC segment.

Piers Brown: And the FRC.

Piers Brown: Segment.

Todd Tuckner: from on the on the capital question in terms of an update, you know, yes, you recall correctly that there remains additional capital to be repatriated out of some of the foreign subs, in particular, the UK one, and, and a bit more, as well in the in the US, we're going through the, you know, the normal process with the regulators to approve the release of the capital, which is to say that we continue to work down the portfolios, largely non-core and legacy portfolios in those entities. And as we continue to make progress, and that capital is indeed excess, including from a supervisory standpoint, under their conservative lens, they'll give us the they'll signal the okay, and then we'll repatriate that over the course of the next several quarters.

Piers Brown: From on the on the capital question in terms of an update.

Speaker Change: Yes, you recall correctly that there remains additional capital to be repatriated out of some of the foreign subs in particular, the U K one.

Piers Brown: And and a bit more as.

Piers Brown: As well in the in the U S. We were going through the normal process with the regulators to approve the release of their capital, which is to say that we continue to work down.

Piers Brown: The portfolio is largely non core and legacy portfolios in those entities and as we continue to make progress and that capital is indeed access.

Piers Brown: Including from a supervisory standpoint under their conservative lens, they'll give us the still signal the okay and then we will repatriate that.

Piers Brown: Over the course of the next several quarters.

Todd Tuckner: All right, that's it. Thank you.

Piers Brown: Alright, that's great. Thank you.

Operator: So there are no more questions. So thank you for calling in and for your questions and the IR team is at your disposal for any follow ups. So have a nice day.

Piers Brown: Okay. Thank you. So there are no more questions SaaS. So thank you for calling in and for your questions and the IR team is at your disposal for any follow ups. So.

Have a nice day. Thank you.

Operator: Ladies and gentlemen, the webcast and Q&A session for analysts and investors is over. You may disconnect your lines.

Speaker Change: 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 the media Q&A session. At 10 45 CST. Please thank you.

Operator: We will now take a short break and continue with the media Q&A session at 10.45 CEST. Please, thank you. Transcription by ESO. Translation by —

Piers Brown: Yeah.

Piers Brown: [music].

Piers Brown: Yes.

Piers Brown: [music].