Q2 2026 UBS Group AG Earnings Call

July 29, 2026

Speaker #1: Please. Anyone who wishes to ask a question during the conference, you may press question during the conference may press star star and 1 in the text on telephone.

Speaker #1: and 1 from the telephone. You You will hear a tone. Confirm that you entered the will hear a tone to confirm that you can speak queue.

Speaker #1: English. If you wish to remove yourself from If you wish to remove yourself from the question queue, you may press the star and 1 for 30 seconds; our requested queue is only 10 to 12 lasting the question.

Speaker #1: conference

Speaker #2: Ladies and gentlemen, good morning. Ladies and gentlemen, good morning. Welcome to the UBS Welcome to the UBS second second-quarter 2026 quarter 2026 results. The conference has not been results.

Speaker #2: The conference was not recorded recorded for publication or broadcast. You for publication or broadcast. You can register for questions at any can register for questions at any time time at press desk star and 1 on your at pressing star and 1 on your telephone.

Speaker #2: telephone. Should you need operator Should you need operator assistance, please press star and assistance, please press star and 0. At this time, it's my pleasure 0.

Speaker #2: At this time, it's my pleasure to hand to hand over to Sara Mackie, over to Sara Mackie, UBS UBS Investor Relations. Please go ahead Invest Relations.

Speaker #2: Please go ahead, and.

Speaker #2: madam.

Speaker #3: Good morning Good morning, and welcome, everyone. Before and welcome, everyone. Before we we start, I'd like to draw your attention to start, I would like to draw your attention to our our cautionary statement slide at the back cautionary statement slide at the back of of today's results today's results presentation.

Speaker #3: presentation. Please also refer to the risk Please also refer to the risk factors included in our annual factors, included in our annual report, report, together with additional disclosures in together with additional disclosures in our SEC our S&P filing.

Speaker #3: filing. Throughout our remarks, we will refer to Throughout our remarks, we will refer to underlying results in US underlying results in US dollars dollars and make year-over-year comparisons and make year-over-year comparisons unless stated unless stated otherwise.

Speaker #3: On slide 2, otherwise. On slide 2, you can you can see our agenda for see our agenda for today. It's now my pleasure to hand today.

Speaker #3: It's now my pleasure to hand over to Sergio Amati, Group CEO.

Speaker #3: CEO.

Speaker #4: Thank you, Sara, and good morning, everyone. Almost three years ago, we presented our first set of consolidated results. From the beginning, I made it clear that the acquisition of Credit Suisse was not a gift that we received, but rather a prize that we would earn.

Speaker #4: Thank you, Sara. And good morning, everyone. Almost three years ago, we presented our first set of consolidated results. From the beginning, I made it clear that the acquisition of Credit Suisse was not a gift that we received, but rather a prize that we would have all had to fight have all had to fight to to win.

Speaker #4: win. As expected, the journey was not As expected, the journey was not as straightline. It required as straightline. It required a a lot of hard work from my lot of hard work from my colleagues at UBS colleagues at UBS and and painful painful decisions.

Speaker #4: decisions. Now it is efforts are paying Now it is efforts are paying off, and the off, and the extraordinary patience and extraordinary patience and support of our shareholders is support of our shareholders is starting starting to be to be rewarded.

Speaker #4: In the first half of the year, we rewarded. In the first half of the year, we achieved a return on achieved a return on CP1 capital of around CT1 capital of around 17%. 17%.

Speaker #4: In the first half of the year, we rewarded. In the first half of the year, we achieved a return on achieved a return on CP1 capital of around CT1 capital of around 17%.

Speaker #4: While the year is not over, While the year is not over, we are close to achieving the we are close, achieving the same level of profitability same level of profitability UBS had prior to the UBS had prior to the acquisition, underscoring acquisition, underscoring our efforts over the last three our efforts over the last three years.

Speaker #4: years. Just as importantly, Just as importantly, we we laid the foundation to drive laid the foundation to drive sustainable value creation and sustainable value creation and long-term growth while long-term growth while providing enhanced capabilities to providing enhanced capabilities to our our clients and even better clients and even better opportunities for our opportunities for our people.

Speaker #4: people. The second quarter The second quarter provided further evidence of the power of provided further evidence of the power of our globally diversified our globally diversified franchise and our franchise and our potential.

Speaker #4: potential. Markets remain Markets remain remarkably resilient and client remarkably resilient and client sentiment was constructive, supported sentiment was constructive, supported by growing confidence in by growing confidence in the the long-term outlook for long-term outlook for global global growth and continued growth and continued investment in AI and investment in AI and emerging emerging technologies.

Speaker #4: Against this technologies. Against this backdrop, our integrated one backdrop, our integrated one bank bank model remains a key driver model remains a key driver of of growth as we growth as we deliver deliver the full breadth of our capabilities across the firm, capabilities across the firm, to to clients, deepening clients, deepening relationships, relationships, and reinforcing and reinforcing our competitive our competitive position.

Speaker #4: This was reflected in position. This was reflected in another quarter of robust another quarter of robust inflows inflows into our global wealth into our global wealth and asset management and asset management platforms.

Speaker #4: Which drove Group Investor platforms. Which drove Group Invested Assets to a record of Assets to a record of $7.3 $7.3 trillion. The value of trillion.

Speaker #4: The value of collaboration is most evident in collaboration is most evident in the the performance of our APAC and performance of our APAC and America's regions. America's regions.

Speaker #4: The value of collaboration is most evident in collaboration is most evident in the the performance of our APAC and performance of our APAC and America's regions.

Speaker #4: This This quarter, where we quarter, where we achieved achieved several revenue records several revenue records across across our our franchises. Profit before tax franchises.

Speaker #4: Profit before tax doubled in APAC and grew doubled in APAC and grew by 85% in the by 85% in the Americas. In Americas. In Switzerland, we granted or Switzerland, we granted or renewed around $14 billion renewed around $14 billion Swiss Swiss francs of loans to francs of loans to businesses businesses and households.

Speaker #4: And and households. And we we saw broad-based growth saw broad-based growth across all our across all our businesses booked in businesses booked in Switzerland, Switzerland, and for the first full and for the first full quarter, in which quarter, in which we were operating on we were operating on UBS UBS platforms.

Speaker #4: platforms. Investment banks delivered another quarter Investment banks delivered another quarter of of exceptional returns while exceptional returns while maintaining risk and capital maintaining risk and capital discipline.

Speaker #4: A reflection of our discipline. A reflection of our strengthened competitive strengthened competitive position position and the enhanced and the enhanced scale scale of our of our platform.

Speaker #4: We are also close platform. We are also close to to substantially completing the substantially completing the integration integration by the end of the year, as by the end of the year, as planned.

Speaker #4: With all planned. With all clients clients migrated and the wind-down of migrated and the wind-down of non-core and legacy year in non-core and legacy year in completion, completion, more than 90% of more than 90% of legacy business applications are no legacy business applications are no longer in use.

Speaker #4: longer in use. This enabled us to This enabled us to accelerate accelerate decommissioning and decommissioning and further simplify our further simplify our operations. As we realize cost operations.

Speaker #4: As we realize cost synergies, synergies, we continue to strategically invest to we continue to strategically invest to drive long-term growth by drive long-term growth by expanding our technological expanding our technological capabilities, including AI, capabilities, including AI, digital assets, and digital assets, and infrastructure.

Speaker #4: infrastructure. We are empowering We are empowering our end colleagues with our end colleagues with the tools and skills needed to tools and skills needed to accelerate adoption and accelerate adoption and deliver greater value for deliver greater value for clients clients and help improve and help improve productivity productivity in the coming in the coming years.

Speaker #4: years. Our performance to date has Our performance to date has resulted resulted in healthy capital in healthy capital generation, just as generation, just as further further fortified our balance sheet for fortified our balance sheet for all seasons, and allows us all seasons, and allows us to continue to deploying to continue to deploy resources toward profitable resources towards profitable growth growth opportunities to support opportunities to support clients and deliver on our clients and deliver on our capital return capital return ambitions.

Speaker #4: With our ambitions. With our latest latest share repurchase program share repurchase program just just finished, we are continuing finished, we are continuing with with another program under which we another program under which we intend to buy back $3 intend to buy back $3 billion of shares billion of shares at the latest by the end of the at the latest by the end of the second quarter.

Speaker #4: second quarter, 2027. 2027. We We plan to buy back at least $1 plan to buy back at least $1 billion over the next three billion over the next three months.

Speaker #4: months. The amount and The amount and pace will remain pace will remain subject to our short-term subject to our short-term financial performance and financial performance and outlook, maintaining a outlook, maintaining a CT1 CP1 capital ratio of around capital ratio of around 14%, and further 14%, and further visibility on the visibility on the deliberation by the Swiss Parliament on deliberation by the Swiss Parliament on the capitalization of the capitalization of foreign foreign subsidiaries.

Speaker #4: As we enter the third subsidiaries. As we enter the third quarter, quarter, market conditions remain broadly market conditions remain broadly constructive, supported by healthy client constructive, supported by healthy client engagement, the continued broadening engagement, the continued broadening of market leadership, and of market leadership, and historically historically elevated equity elevated equity dispersion.

Speaker #4: At the same time, dispersion. At the same time, ongoing geopolitical developments and ongoing geopolitical developments and volatile energy prices lead to volatile energy prices lead to high high levels of levels of uncertainty around uncertainty around inflation and interest rate inflation and interest rate outlook.

Speaker #4: outlooks. This could This could contribute to changes in macroeconomic contribute to changes in macroeconomic conditions, periods of conditions, periods of elevated volatility, and more elevated volatility, and more measured investor measured investor sentiment.

Speaker #4: In sentiment. In closing, we enter the closing, we enter the second second half of the year with half of the year with considerable momentum and we are considerable momentum and we are well well positioned to outperform positioned to outperform our our 2026 exit rate 2026 exit rate return target and achieve return target and achieve our exit rate housing our exit rate cost-income ratio target.

Speaker #4: fund ratio target. But But we know that conditions can change we know that conditions can change quickly, and important quickly, and important work work remains.

Speaker #4: As remains. As a a result, we remain firmly result, we remain firmly focused on what we can focused on what we can control. Staying close to control.

Speaker #4: Staying close to clients, clients, completing the integration, completing the integration, executing on our growth executing on our growth plans, and managing risk with plans, and managing risk with discipline.

Speaker #4: All while discipline. All while remaining a trusted partner in the remaining a trusted partner in the communities where we live and communities where we live and work.

Speaker #4: work. With that, let With that, let me hand over to me hand over to Claude.

Speaker #4: Claudia. Thank you, Sergio, and

Speaker #5: Thank you, Sergio, and good morning, everyone. In the good morning, everyone. In the second quarter, we delivered second quarter, we delivered reported reported net profit of $2.8 net profit of $2.8 billion billion and earnings per share of and earnings per share of $87 $87 cents.

Speaker #5: cents. On an On an underlying basis, our pre-tax profit was underlying basis, our pre-tax profit was $3.9 billion, up $3.9 billion, up 45% year on year, and our return 45% year on year, and our return on CP1 capital was on CT1 capital was 16.4%.

Speaker #5: 16.4%. Revenues increased by Revenues increased by 16% 16% to $13.3 billion, to $13.3 billion, and and were up 14% across our we're up 14% across our core franchises.

Speaker #5: core franchises. Operating expenses were 7% Operating expenses were 7% higher higher on stronger revenue performance, on stronger revenue performance, and we're down 7% when and were down 7% when excluding variable excluding variable compensation, compensation, litigation, and currency litigation, and currency effects.

Speaker #5: effects. Overall, we drove 8 Overall, we drove 8 percentage points of positive operating percentage points of positive operating leverage, resulting in a leverage, resulting in a cost-income ratio of cost-income ratio of 70%.

Speaker #5: 70%. Moving to slide Moving to slide 6. Our strong 6. Our strong second second quarter results underscore quarter results underscore our our earnings power, with earnings power, with broad-based broad-based growth across each of our core growth across each of our core franchises, led by global wealth franchises, led by global wealth management and the investment management and the investment bank.

Speaker #5: bank. This balanced performance This balanced performance reflects continued client reflects continued client momentum, momentum, the breadth of our the breadth of our capabilities, capabilities, and the durable benefits of and the durable benefits of the the integration.

Speaker #5: integration. On a On a reported basis, our pre-tax profit reported basis, our pre-tax profit of of $3.6 billion, $3.6 billion included included $352 million of revenue $352 million of revenue adjustments, and adjustments, and $645 million of integration $645 million of integration expenses.

Speaker #5: Consistent with our full-year guidance, we expect full-year guidance, we expect integration-related expenses in the integration-related expenses in the second second half to be around half to be around $750 million, split roughly evenly between the third and fourth quarters, as we complete the quarters, as we complete the remaining remaining work and close out the work and close out the integration program by integration program by year-end.

Speaker #5: year-end. The effective The effective tax rate was 22%, tax rate was 22%, slightly below our full-year guidance in slightly below our full-year guidance in '23%.

Speaker #5: '23%. Turning to our Turning to our cost update on slide cost update on slide 7. 7. During the second During the second quarter, we delivered further gross cost quarter, we delivered further gross cost reductions of $1.1 reductions of $1.1 billion, billion, bringing cumulative savings at the end bringing cumulative savings since the end of 2022 to of 2022 to $12.6 billion.

Speaker #5: $12.6 billion, with more With more than 90% of the cost synergies than 90% of the cost synergies expected from the acquisition now expected from the acquisition now realized, we remain realized, we remain firmly on track to achieve our firmly on track to achieve our $13.5 billion ambition by $13.5 billion ambition by the end the end of this of this year.

Speaker #5: The total headcount at year. The total headcount at quarter-end was 112,000, 4% lower sequentially, 4% lower sequentially, and and approximately 28% approximately 28% below our 2022 below our 2022 baseline.

Speaker #5: baseline. Over this same Over this same period, we've also reduced period, we've also reduced the the group's operating expenses by group's operating expenses by 28%, when excluding 28%, when excluding litigation, variable compensation, litigation, variable compensation, and and currency currency effects.

Speaker #5: Building on strong execution in effects. Building on strong execution in the the first quarter, we further first quarter, we further progressed our cost actions in progressed our post-actions in Q2, accelerating the realization Q2, accelerating the realization of of synergies we had expected later this synergies we had expected later this year.

Speaker #5: year. Together with strong Together with strong revenue performance, this has created revenue performance, this has additional capacity, which we are created additional capacity, which we are selectively directing towards selectively directing towards investments investments in growth, technology, in growth, technology, and and operational resilience to operational resilience to strengthen our positioning for the strengthen our positioning for the future.

Speaker #5: At the same future. At the same time, time, we remain firmly we remain firmly focused on delivering our underlying focused on delivering our underlying cost-income ratio target as of the end cost-income ratio target as of the end of of the the year.

Speaker #5: Turning year. Turning to to slide 8. As of the end of slide 8, as of the end of June, our balance sheet for all seasons June, our balance sheet for all seasons consisted consisted of $1.7 trillion in total of $1.7 trillion in total assets. assets.

Speaker #5: Within that, we saw 1% sequential growth in our we saw 1% sequential growth in our loan book, while deposit balances loan book, while deposit balances were were broadly stable.

Speaker #5: broadly stable. Credit quality within our loan Credit quality within our loan portfolio portfolio remained strong. With credit remained strong, with credit and and paired exposures of 1%, paired exposures of 1%, and and a 7 basis point cost of a 7 basis point cost of risk.

Speaker #5: Group credit risk. Group credit loss expense totaled $121 loss expense totaled $121 million, largely driven by million, largely driven by stage stage 3 positions in personal and 3 positions in personal and corporate banking and the investment corporate banking and the investment bank.

Speaker #5: Our tangible bank. Our tangible book book value per share decreased sequentially value per share decreased sequentially by by 2% to 2% to $26.89, $26.89, primarily at shareholder primarily at shareholder distributions distribution of 3.4 billion related of $3.4 billion related to to the 2025 the 2025 dividend and share repurchases in the dividend and share repurchases in the quarter, more than offset quarter, more than offset total total comprehensive comprehensive income.

Speaker #5: On funding, having income. On funding, having completed completed our 81 plan by the end of our 81 plan by the end of March, we took advantage of March, we took advantage of favorable favorable market conditions in the second market conditions in the second quarter quarter to pre-fund part of our to pre-fund part of our future 81 future 81 needs.

Speaker #5: needs. Looking ahead, we'll remain Looking ahead, we'll remain opportunistic as market opportunistic as market conditions conditions allow. allow. Overall, we continue to operate with a Overall, we continue to operate with a highly fortified and resilient balance highly fortified and resilient balance sheet, with total loss of building sheet, with total loss absorbing capacity capacity of $194 of $194 billion, billion, a net stable funding ratio of a net stable funding ratio of 115%, and an 115%, and an LCR of LCR of 177%.

Speaker #5: 177%. Turning to Turning to capital on slide 9. capital on slide 9, our CET1 capital ratio at the end Our CET1 capital ratio at the end of June was of June was 14.4%, and our CET1 14.4%, and our CET1 leverage ratio was leverage ratio was 4.4%.

Speaker #5: 4.4%. Our common Our common equity Tier 1 capital in the quarter equity Tier 1 capital in the quarter decreased by 0.8 decreased by 0.8 billion, mainly as earnings accretion billion, mainly as earnings accretion was was more than offset by accruals more than offset by accruals for for future capital returns, future capital returns, including including the entirety of the new $3 the entirety of the new $3 billion share repurchase program billion share repurchase program that Sergio highlighted that Sergio highlighted earlier.

Speaker #5: The buyback accrual reduced earlier. The buyback accrual reduced our CET1 capital ratio in the our CET1 capital ratio in the quarter by around 60 basis quarter by around 60 basis points, with a 20 basis point impact points, with a 20 basis point impact on our CET1 leverage on our CET1 leverage ratio.

Speaker #5: ratio. RWA increased by 4 billion, RWA increased by $4 billion, while while LRD was lower sequentially by LRD was lower sequentially by a a similar amount, reflecting similar amount, reflecting disciplined resource deployment disciplined resource deployment alongside elevated client alongside elevated client activity.

Speaker #5: activity. Turning to Turning to UBS AG, the parent bank's UBS AG, the parent bank's standalone CET1 capital ratio standalone CET1 capital ratio on a on a fully applied basis fully applied basis increased sequentially to increased sequentially to 14.4%, mainly reflecting 14.4%, mainly reflecting dividend payments from its subsidiaries dividend payments from its subsidiaries and strong operating and strong operating performance.

Speaker #5: This was partially offset by performance. This was partially offset by a a 1.8 billion dividend accrual 1.8 billion dividend accrual in in the the quarter.

Speaker #5: Turning to our business division and quarter. Turning to our business divisions and starting on slide 10, the global starting on slide 10 with global wealth wealth management.

Speaker #5: management. GWM delivered a pre-tax profit of GWM delivered a pre-tax profit of $2 $2 billion, up 38% year billion, up 38% year over over year, with positive operating year, with positive operating jars jars of 7 points and of 7 points and double-digit double-digit growth across all regions, and growth across all regions, and revenue revenue lines.

Speaker #5: lines. Our performance this quarter once again Our performance this quarter once again demonstrates the strength and breadth of demonstrates the strength and breadth of our wealth franchise.

Speaker #5: The our wealth franchise. The combination of leading combination of leading capabilities differentiated CIO capabilities, differentiated CIO insight and a truly global insight, and a truly global footprint.

Speaker #5: Positions footprint. Positions us to capture an increasing us to capture an increasing share share of the secular growth of the secular growth in in global wealth.

Speaker #5: global wealth. Net Net new assets totaled $36 new assets totaled $36 billion, equivalent to 3% billion, equivalent to 3% annualized growth, and contributing to annualized growth, and contributing to a a seasonal sequential increase in seasonal sequential increase in invested assets of invested assets of 6%.

Speaker #5: We continue to see 6%. We continue to see strong strong demand for our CIO-led demand for our CIO-led solutions, leading to $13 solutions, leading to $13 billion of net new fee-generating billion of net new fee-generating assets and record mandate assets and record mandate penetration.

Speaker #5: Clear evidence of penetration. Clear evidence of the the value clients place on our value clients place on our trusted expert trusted expert advice. Demand for discretionary advice.

Speaker #5: Demand for discretionary mandates remained particularly mandates remains particularly strong, including for our flagship My strong, including for our flagship My Way Way Solution, with invested solution, with invested assets assets now exceeding $40 now exceeding $40 billion, up 75% year billion, up 75% year on on year.

Speaker #5: year. Client sentiment remained constructive during the Client sentiment remained constructive during the quarter, supporting continued quarter, supporting continued re-leveraging across re-leveraging across regions. Net new loans were $7 regions.

Speaker #5: Net new loans were $7 billion, billion, mainly driven by Lombard, mainly driven by Lombard, especially in the Americas and especially in the Americas and APAC, net new deposits were $2 APAC, net new deposits were $2 billion, as inflows into current and billion as inflows into current and savings accounts more than offset savings accounts, more than offset outflows in fixed-term outflows in fixed-term deposits.

Speaker #5: From a regional deposits. From a regional perspective, Asia Pacific delivered perspective, Asia Pacific delivered another quarter of standout another quarter of standout performance, with pre-tax profit performance, with pre-tax profit up up 48%, a 48%, a 45% pre-tax margin, 45% pre-tax margin, and and double-digit growth across all double-digit growth across all revenue lines.

Speaker #5: Asset revenue lines. Asset gathering also remained strong, with gathering also remained strong, with annualized growth of 5% in net new annualized growth of 5% in net new assets and 8% in net assets and 8% in net new new fee-generating fee-generating assets.

Speaker #5: Mandate penetration increased by assets. Mandate penetration increased by 5 5 percentage points year on year to a percentage points year on year to a record record level, underscoring how level, underscoring how the APAC wealth team is the APAC wealth team is broadening client relationships and broadening client relationships and adding adding another dimension to its another dimension to its growth growth through more recurring and through more recurring and diversified diversified revenue revenue streams.

Speaker #5: In the Americas, streams. In the Americas, disciplined discipline execution of our strategic execution of our strategic priorities continues to drive stronger priorities continues to drive stronger momentum momentum and and profitability.

Speaker #5: profitability. Pre-tax profits grew Pre-tax profits were 47%, with a pre-tax margin 47%, with a pre-tax margin of of 16%, supported 16%, supported by by record quarterly revenues.

Speaker #5: record quarterly revenues. Net new loans were $3 billion, Net new loans were $3 billion, reflecting continued traction from reflecting continued traction from our our enhanced banking enhanced banking capabilities.

Speaker #5: capabilities. Strong CSOR Strong CSOR performance drove positive net new assets of performance drove positive net new assets of $1 $1 billion despite around $10 billion, despite around $10 billion of seasonal tax-related billion of seasonal tax-related outflows.

Speaker #5: outflows. In May, In May, I delivered another strong quarter, I delivered another strong quarter, with pre-tax profit increasing with pre-tax profit increasing 28% and the pre-tax 28% and the pre-tax margin margin reaching 38%, reaching 38%, alongside $12 billion of net new alongside $12 billion of net new assets.

Speaker #5: assets. Continued and Continued and sustained demand for CIO-led sustained demand for CIO-led solutions drove 9% annualized solutions drove 9% annualized growth in net new fee-generating growth in net new fee-generating assets, helping lift mandate assets, helping lift mandate penetration by 5 percentage points penetration by 5 percentage points year year on year, and setting a new on year, and setting a new benchmark for the benchmark for the division.

Speaker #5: division. Our Swiss unit, through its Our Swiss unit, through its pre-tax profit by pre-tax profit by 25% 25% and attracted $14 billion and attracted $14 billion in in net new assets, net new assets, reflecting reflecting growing client momentum and growing client momentum and operating efficiency, operating efficiency, following the following the successful completion of the successful completion of the Swiss Swiss booking center migration, last working center migration.

Speaker #5: Last quarter. Turning quarter. Turning to to divisional revenues, which increased divisional revenues, which increased by 14%. by 14%. Recurring net income grew by Recurring net income grew by 11% to $3.7 11% to $3.7 billion, billion, supported by positive market supported by positive market performance and around $70 billion of performance and around $70 billion of net net new fee-generating assets over the past new fee-generating assets over the past 12 12 months.

Speaker #5: months. Transaction-based income rose Transaction-based income rose 23% to $1.5 billion, 23% to $1.5 billion, marking the 12th consecutive marking the 12th consecutive quarter quarter of double-digit year-on-year of double-digit year-on-year growth.

Speaker #5: APAC and the growth. APAC and the Americas Americas each grew transaction fees by each grew transaction fees by around around 30%, fueled by 30%, fueled by strong strong client activity and structured client activity and structured products and cash equities.

Speaker #5: products and cash equities. This This reflects the power of our reflects the power of our integrated client-centric approach, integrated client-centric approach, bringing together GWM and the bringing together GWM and the IB to deliver IB to deliver differentiated differentiated solutions at solutions at scale.

Speaker #5: Net interest income of scale. Net interest income of $4.8 billion rose by $1.8 billion rose by 12% year over year, and 12% year over year, and 1% sequentially, with the 1% sequentially, with the quarter-on-quarter rise largely driven by quarter-on-quarter rise largely driven by higher loan higher loan volumes.

Speaker #5: volumes. For 3Q, we For 3Q, we expect expect GWM and NII to increase GWM NII to increase modestly, supported by further modestly, supported by further lending expansion and higher lending expansion and higher deposit margins.

Speaker #5: We deposit margins. We now expect full-year now expect full-year 2026 GWM net interest 2026 GWM net interest income to grow by around income to grow by around 10% versus 10% versus 2025, 2025, with strong loan growth, with strong loan growth, higher US dollar rates than previously higher US dollar rates than previously assumed, and an improved assumed, and an improved deposit deposit mix more than offsetting mix more than offsetting margin compression in lower-rate margin compression in lower-rate currencies.

Speaker #5: currencies. Operating expenses in GWM rose Operating expenses in GWM rose by by 6%, when excluding 6%, when excluding variable variable compensation litigation and compensation litigation and currency effects, cost currency effects cost declined declined by by 1%.

Speaker #5: 1%. Turning Turning to personal and corporate banking on to personal and corporate banking on slide slide 11. P&C 11. P&C delivered a pre-tax profit of delivered a pre-tax profit of $676 million Swiss francs, up $676 million Swiss francs, up 21%, with positive 21%, with positive operating operating leverage of 7 percentage leverage of 7 percentage points.

Speaker #5: With the final stages of points. With the final stages of client client account migration successfully account migration successfully completed, our Swiss completed, our Swiss business business entered the second quarter fully entered the second quarter fully focused on growth.

Speaker #5: focused on growth. Strong Strong momentum in both attracting new momentum in both attracting new clients and deepening existing clients and deepening existing relationships drove positive relationships drove positive net new net new clients, balance sheet clients, balance sheet expansion across both loans and expansion across both loans and deposits, and 10% deposits, and 10% annualized net new investment annualized net new investment product product growth for the first growth for the first half.

Speaker #5: These higher volumes half. These higher volumes and and client activity levels client activity levels contributed to a 3% increase in contributed to a 3% increase in total revenues.

Speaker #5: total revenues. Net Net interest income increased by 1% year interest income increased by 1% year on on year, and 2% year and 2% sequentially, driven by higher loan sequentially, driven by higher loan volumes, we expect volumes.

Speaker #5: We expect continuing continuing lending momentum to lending momentum to support flat to slightly support flat to slightly higher P&C NII in the higher P&C NII in the third third quarter.

Speaker #5: quarter. Non-interest revenue increased by 4%, Non-interest revenue increased by 4%, led led by personal banking, where by personal banking, where custody and mandate fees benefited from custody and mandate fees benefited from positive markets and strong net positive markets and strong net new new investment product investment products flows.

Speaker #5: In corporate and institutional growth. In corporate and institutional clients, lower activity and clients, lower activity and structured and indicated structured and syndicated finance finance largely reflected deal largely reflected deal timing, slipping into later periods, timing, slipping into later periods, while trade and export finance remained while trade and export finance remained strong.

Speaker #5: Particularly among strong. Particularly among clients in the energy clients in the energy sector. Other revenues this sector. Other revenues this quarter quarter included valuation gains on included valuation gains on investments.

Speaker #5: investments. Credit loss expense was Credit loss expense was $61 million Swiss francs, driven $61 million Swiss francs, driven by by stage 3 positions. stage 3 positions.

Speaker #5: Given Even ongoing macroeconomic ongoing macroeconomic uncertainty, we continue to expect credit uncertainty, we continue to expect credit losses in the second half to average losses in the second half to average around around $75 million Swiss francs per $75 million Swiss francs per quarter. quarter.

Speaker #5: Reflecting the first Reflecting the book first-half outcome, we now half outcome, we now expect P&C's full-year expect P&C's full-year CLE to come in below our previous CLE to come in below our previous estimate estimate of around $300 million of around $300 million Swiss Swiss francs.

Speaker #5: francs. Operating expenses declined by 4%, Operating expenses declined by 4%, driven driven by continued synergy by continued synergy realization realization and discipline cost and disciplined cost management.

Speaker #5: management. Turning to asset management on slide Turning to asset management on slide 12. Pre-tax profit grew 12. Pre-tax profit grew by by 9% to 9% to $237 $237 million, with assets under million, with assets under management management surpassing $2.2 surpassing $2.2 trillion.

Speaker #5: Revenues declined by trillion. Revenues declined by 2%, mainly reflecting the absence 2%, mainly reflecting the absence of fee contributions from of fee contributions from O'Connor, following a sale at the end of last O'Connor, following its sale at the end of last year.

Speaker #5: Excluding business year. Excluding business exit effects, revenues exit effects, revenues increased increased by 5%, as fees from by 5%, as fees from higher average invested higher average invested assets assets were partly offset by margin were partly offset by margin pressure and an adverse year-on-year pressure and an adverse year-on-year swing in net valuation swing in net valuation effects.

Speaker #5: effects. Net new money was Net new money was $6 billion, driven by $6 billion, driven by SMAs, ETFs, and unified estimates ETF and unified global alternatives.

Speaker #5: effects. Net new money was Net new money was $6 billion, driven by $6 billion, driven by SMAs, ETFs, and unified estimates ETF and unified global alternatives. global alternatives.

Speaker #5: UGA reached $366 UGA reached $366 billion of invested assets and billion of invested assets and attracted $10 billion of new commitments attracted $10 billion of new commitments across GWM and AM in the across GWM and AM in the quarter.

Speaker #5: quarter. Building on this momentum, we Building on this momentum, we recently recently announced a strategic partnership announced a strategic partnership with MSCI to with MSCI to enhance enhance transparency and support transparency and support growth growth by combining our investment by combining our investment expertise expertise and client insights with and client insights with MSCI's data and MSCI's data and analytics analytics capabilities.

Speaker #5: Operating expenses capabilities. Operating expenses declined 6%, reflecting declined 6%, reflecting ongoing cost discipline and the ongoing cost discipline and the lower lower direct expense base following direct expense base following the the O'Connor disposal.

Speaker #5: O'Connor disposal. We expect the sales to have We expect the sale to have broadly broadly similar impacts on third similar impacts on third and and fourth quarter revenue and expense fourth quarter revenue and expense comparisons.

Speaker #5: Onto comparisons. Onto slide slide 13. The investment 13. The investment bank bank delivered excellent results, delivered excellent results, generating record 2Q generating record Q2 revenues, revenues, a pre-tax profit of a pre-tax profit of $1.2 $1.2 billion, more than double the billion, more than double the prior prior year quarter, and a pre-tax year quarter, and a pre-tax return on equity of over return on equity of over $23%.

Speaker #5: Notably, 23%. Notably, we we achieved this performance achieved this performance without materially expanding our balance without materially expanding our balance sheet. While revenues increased sheet, while revenues increased 31% to $3.7 31% to $3.7 billion, RWA and LRD rose billion, RWA and LRD rose only modestly, underscoring only modestly, underscoring the the strength of our client franchise and strength of our client franchise and our our ability to capture ability to capture significantly significantly higher activity with higher activity with disciplined use of financial disciplined use of financial resources.

Speaker #5: Global banking Global banking revenues increased by 33% to revenues increased by 33% to $693 $693 million. Capital markets was a million. Capital markets was a standout, standout, up 55%, with up 55%, with notable strength in LCM, where notable strength in LCM, where revenues more than doubled year on year, revenues more than doubled year on year, alongside strong performances in alongside strong performances in both ECM and both ECM and DCM.

Speaker #5: Advisory DCM. Advisory revenues revenues were 5% lower, were 5% lower, primarily reflecting an M&A market primarily reflecting an M&A market increasingly skewed toward a small number increasingly skewed toward a small number of of very large very large transactions, transactions, where participation is often where participation is often influenced by broader client financing influenced by broader client financing relationships.

Speaker #5: relationships. Looking Looking ahead, our pipeline remains ahead, our pipeline remains healthy, with strong client engagement healthy, with strong client engagement and activity building across and activity building across regions.

Speaker #5: regions. Supported by close Supported by close collaboration with GWM in collaboration with GWM in originating advisory originating advisory opportunities. opportunities. Beyond the very largest deals, we continue to see good deals, we continue to see good momentum across the broader advisory momentum across the broader advisory market, particularly in the mid to market, particularly in the mid to large-cap segment, where our large-cap segment, where our competitive position continues to competitive position continues to strengthen.

Speaker #5: strengthen. Global Global markets delivered a record second quarter, markets delivered a record second quarter with with revenues increasing by revenues increasing by 31% to just over $3 31% to just over $3 billion, equities led the billion, equity led the performance, performance, with revenues up 53% with revenues up 53% on on strong client activity, strong client activity, elevated cash equity volume, y, elevated cash equity volume, and exceptional momentum in Asia and exceptional momentum in Asia Pacific, where markets achieved a Pacific, where markets achieved a record quarter.

Speaker #5: record quarter. FRC revenues were 21% FRC revenues were 21% lower, reflecting a less favorable lower, reflecting a less favorable environment for our business mix than a year environment for our business mix than a year ago, and discipline ago, and discipline resource allocation as we selectively resource allocation as we selectively shifted balance sheet capacity shifted balance sheet capacity to to capitalize on stronger client capitalize on stronger client momentum in momentum in equities.

Speaker #5: Operating expenses equities. Operating expenses increased increased by 11%, driven by by 11%, driven by higher higher personnel personnel expenses. On slide expenses. On slide 14, non-core and legacy generated 14, non-core and legacy generated pre-tax loss of $52 million, pre-tax loss of $52 million, while while we continue to drive down we continue to drive down costs costs on an accelerated on an accelerated basis.

Speaker #5: Excluding litigation, basis. Excluding litigation, expenses in the quarter declined expenses in the quarter declined 72% 72% year on year, and 30% year on year and 30% sequentially, resulting in cost sequentially, resulting in cost reduction versus the 2022 reductions versus the 2022 baseline of baseline of 88%.

Speaker #5: Reflecting the 88%. Reflecting the pace pace and scale of cost savings already and scale of cost savings already achieved, we now expect the achieved, we now expect the 2026 exit rate for NCL 2026 exit rate for NCL operating operating expenses excluding expenses excluding litigation to be around $400 litigation to be around $400 million.

Speaker #5: Risk-weighted Risk-weighted assets in NCL were broadly stable assets in NCL were broadly stable sequentially, reflecting a sequentially, reflecting a concentration concentration of smaller, more bespoke of smaller, more bespoke positions in the residual positions in the residual portfolio.

Speaker #5: To close, To close, the the return on QQ1 capital and the return on Q2 on capital and the cost-income ratio we delivered in the first cost income ratio we delivered in the first half of 2026 half of 2026.

Speaker #5: are important proof points of the earnings power and scalability of the earnings power and scalability of our franchise, as well as our franchise, as well as our our continued cost discipline.

Speaker #5: They continued cost discipline. They also demonstrate how strong also demonstrate how strong client client engagement, discipline engagement, disciplined execution, and capital execution, and capital efficiency are translating into efficiency are translating into durable operating leverage, as we enter the durable operating leverage, as we enter the final phases of the integration final phases of the integration and position the firm for future and position the firm for future growth.

Speaker #5: With both growth. With both metrics metrics already ahead, we'll within striking already ahead, we're within striking distance of our 2026 distance of our 2026 exit exit rate targets, we are rate targets, we are increasingly confident in our increasingly confident in our ability ability to meet and potentially to meet and potentially exceed our financial exceed our financial ambitions.

Speaker #5: With that, let's open for ambitions. With that, we're open for questions. questions.

Speaker #1: We We will now begin the question and answer will now begin the question and answer session for analysts and session for analysts and investors.

Speaker #1: investors. Participants are requested to use only Participants are requested to use only hands while asking a question. hands while asking a question, Anyone who has a question may anyone who has a question may press press star and one at this star and one at this time.

Speaker #1: The first question comes from the line time. The first question comes from the line of of Jeremy Sweaty from BMG Jeremy Seakey from BNP Paribas.

Speaker #1: Paribas. Please go Please go ahead. ahead.

Speaker #3: Good morning. Thank you very much.

Speaker #2: Thanks very much. I wanted to ask a couple of questions about—

Speaker #3: to ask a couple of questions about the

Speaker #2: the businesses, please,

Speaker #3: businesses, please,

Speaker #3: actually. Firstly, on the investment

Speaker #2: actually. Firstly, on the investment

Speaker #3: Bank, I was going to ask how you bank. I was going to ask how you...

Speaker #3: balance the growth opportunity

Speaker #2: balance the growth opportunity

Speaker #3: versus balance sheet constraints that

Speaker #3: versus balance sheet constraints that you impose on that business. But you're sort of showing us what you impose on that business.

Speaker #2: versus the balance sheet constraint that

Speaker #2: But you're sort of showing us here that, actually, you can get the

Speaker #3: Here, actually, you can get the revenue.

Speaker #2: revenue growth without expanding the balance sheet.

Speaker #3: growth without having the balance sheet. And

Speaker #2: But I just wanted you to talk about how you achieve that. How do you put through significantly...

Speaker #3: How do you put through significantly more?

Speaker #3: volume with a more volume with a

Speaker #3: constrained or an unchanged balance

Speaker #2: constrained or an unchanged balance

Speaker #3: Sheet? In the IB, that's my first.

Speaker #2: Sheet? In the IDs, that's my first.

Speaker #3: Question. And then the second one:

Speaker #2: Question. And then the second one:

Speaker #3: was just on US wealth

Speaker #2: was just on US wealth

Speaker #3: management, and it's really a

Speaker #2: management, and it's really a

Speaker #3: theme that you scored significant

Speaker #2: theme. But you score

Speaker #2: significant further advisor exits

Speaker #3: further advisor exits in

Speaker #3: the quarter. I just

Speaker #2: in the quarter. I just

Speaker #3: Wanted to comment on those, wanted to comment on those.

Speaker #3: exits and more broadly where

Speaker #2: exits and, more broadly,

Speaker #2: where are you in the stabilization of the US wealth management

Speaker #3: the US wealth management franchise.

Speaker #2: franchise. Thank

Speaker #3: Thank

Speaker #3: you. Hey, Jeremy. Thanks for

Speaker #2: you.

Speaker #2: Hey, Jeremy. Thanks for those

Speaker #3: those questions. So, in terms of the IB, I—

Speaker #2: of the IB, I

Speaker #2: mean, that is an

Speaker #3: mean, that is an

Speaker #2: Excellent point you bring up, and something—excellent point you bring up, and something,

Speaker #2: course, we're very focused

Speaker #3: of course, we're very focused

Speaker #2: on. We operate on.

Speaker #3: We operate within

Speaker #2: within our

Speaker #2: limits. our limits.

Speaker #3: We think that's important

Speaker #2: that's important

Speaker #2: to the

Speaker #3: to the

Speaker #2: value proposition that we

Speaker #3: value proposition that we

Speaker #2: offer. Which is

Speaker #3: offer. Which is

Speaker #2: to run an investment bank, that—to run an investment bank that

Speaker #2: supports global wealth management and

Speaker #3: supports global wealth management and

Speaker #2: also our corporate and institutional

Speaker #3: also our corporate

Speaker #3: institutional clients. And so for

Speaker #2: clients. And so for

Speaker #3: us, resource allocation to the IB and within the

Speaker #2: the IB and within the

Speaker #2: IB is really, for us, stock and—

Speaker #3: IB is really, for us, stock.

Speaker #3: and trade, and how we're very

Speaker #2: trade and how we're very focused.

Speaker #3: Focused. You asked about how—I mean, the

Speaker #2: You asked about how. I mean, the...

Speaker #2: focus for the business was really

Speaker #3: Focus for the business was really

Speaker #2: on

Speaker #3: on

Speaker #2: intermediation within equities is

Speaker #3: intermediation within equities

Speaker #3: is where we drove a

Speaker #2: where we drove a

Speaker #3: lot of the outperformance that we

Speaker #2: A lot of the outperformance that we had...

Speaker #3: had in equities.

Speaker #2: in equities.

Speaker #2: And

Speaker #3: And

Speaker #2: so that was

Speaker #3: so that was

Speaker #2: Certainly a focus. The balance is certainly a focus.

Speaker #3: The balance sheet, of course, within...

Speaker #2: sheet, of course, within

Speaker #2: Equities was used more. Equities was used more.

Speaker #2: sparingly to

Speaker #3: sparingly to

Speaker #2: support prime brokerage financing

Speaker #3: support prime brokerage financing

Speaker #2: balances. And balances.

Speaker #3: And as I also highlighted in my

Speaker #2: As I also highlighted in my

Speaker #2: Prepared remarks: We also allocate within the IB as we see.

Speaker #3: prepared remarks, we also

Speaker #3: allocate within the IB as we see fit, and saw more

Speaker #2: fit and saw more opportunities in.

Speaker #3: opportunities in the quarter to drive

Speaker #2: the quarter to drive some

Speaker #3: some of the

Speaker #2: of the market

Speaker #2: outperformance, including a market outperformance, including a

Speaker #2: intermediation and move some of

Speaker #3: intermediation and move some of

Speaker #2: the capital allocation, away from the capital allocation, away from

Speaker #2: FRC into

Speaker #3: FRC into

Speaker #2: equities. On your second

Speaker #3: equities. On your

Speaker #3: second question, look,

Speaker #2: question, look, we're

Speaker #3: We're comfortable with the steps we're taking.

Speaker #2: comfortable with the steps we're taking.

Speaker #3: taking to

Speaker #2: to drive

Speaker #2: full-year net new assets, and drive full-year net new assets, and

Speaker #2: wealth in the Americas. We also

Speaker #3: Americas. We also recognize there's a lag effect from

Speaker #2: recognize there's a lag effect from

Speaker #2: previously announced FA

Speaker #3: previously announced FA

Speaker #2: movement that will continue to show up in flows for movement that will continue to show up in

Speaker #2: a few quarters. Flows for a few quarters.

Speaker #3: That said, we're actively recruiting. And—

Speaker #2: actively recruiting and

Speaker #2: investing in teams aligned with our profitability

Speaker #3: investing in teams aligned

Speaker #3: with our profitability ambitions. And it's important to note the

Speaker #2: ambitions. And it's important to note the

Speaker #2: rotation among financial advisors, rotation among financial advisors

Speaker #2: remains elevated across the industry, given that it remains elevated across the industry.

Speaker #3: given record valuation.

Speaker #2: But we

Speaker #2: dynamics to normalize in our book over the course of—we continue to expect these

Speaker #3: dynamics to normalize in our books over the course of 2026.

Speaker #2: 2026. Okay.

Speaker #3: Thank Okay. Thank you.

Speaker #3: you.

Speaker #1: The The next question comes from the line of next question comes from the line of Julia Aurora Miocco from Morgan Julia Aurelia from Morgan Stanley.

Speaker #1: Stanley, please go ahead.

Speaker #4: Hi. Hi, good morning. Thank you Good morning. Thank you for taking my question. And my for taking my question. My first first one is on the buyback of 3 one is on the buyback to 3 billion.

Speaker #4: How billion. How should we lead with should we read June 27 rather regard to June 27 rather than until year-end? than until year-end? So I would guess, if we So I would guess, if we get some sort of compromise in funding, get some sort of compromise environment, maybe it can be completed by maybe it can be completed by year-end.

Speaker #4: year-end. If not, If not, by by June. So any June. So any comment on how do you think about the comment on how should we think about the buyback?

Speaker #4: It would be buyback? It would be great. great. And secondly, on the And secondly, on the current capital that's about 50 billion after pilot, capital plus 50 billion quarter on quarter.

Speaker #4: Any a quarter, any comment on that capital comment on that capital build, please? Thank yield, please. Thank you.

Speaker #4: you.

Speaker #2: Go ahead, Julia. Thanks for Thanks for the questions. So the question. So look, look, the way the way the share buyback language the share buyback way was constructed was constructed was to do a couple of was to do a couple of things.

Speaker #2: Yeah. Hey, Julia.

Speaker #2: things. One, we wanted to talk One, we wanted to talk about commitment of at about a commitment of at least least a billion that we're going to a billion that we're going to do over the next three months.

Speaker #2: do over the next three months. On the On the other hand, other hand, the the program that we just announced program that we just announced today, today, runs for two it runs for two years.

Speaker #2: We We gave an outlook that we would gave an outlook that we would expect to expect to be done latest be done latest by Q2 27.

Speaker #2: by Q2 27. That's going That's going to depend and be determined to end the determined by, in terms of the by, in terms of the timing, slash pace, but timing, slash pace, but also the amount.

Speaker #2: also the amount. By By the things that we've always the things that we've always said, said, outperformance supported outperformance supported by by markets, our capital markets, our capital ratio ratio, around 14%, but of around 14%, but also the also the deliberations that are deliberations that are ongoing in the parliament ongoing in the parliament around this year's capital issue.

Speaker #2: around the Swiss capital issue. So we sized So we sized that that timing and timing and ultimately, as these ultimately, as these developments offer more developments often move visibility, then we visibility, then we can update on any can update on any changes in our expectations.

Speaker #2: changes in our expectations. But that's the But that's the way we signposted way we sideboarded the timeline on the timeline in this this new program.

Speaker #2: new program. In terms of the In terms of the parent bank and the parent bank and the sequential build in sequential build in capital I think capital I think it's it's owing to a couple of things.

Speaker #2: only through a couple of things. The The first, of course, is first, of course, is the the upper performance of the strong operating performance of the group, which manifests well in group, which manifests as well in the the parent bank.

Speaker #2: parent bank. Among Among others, others, the also the strong operating performance the also the strong operating performance in its subsidiaries, in its subsidiaries allowing allowing for stronger levels for stronger levels of upstreaming to the of upstreaming to the parent parent bank, just even bank, just even ordinary ordinary dividends that we saw, for dividends that we saw, for example, by the Americas in the example, by the Americas in the second second quarter, and also by the quarter and also by the Swiss Swiss subsidiary.

Speaker #2: subsidiaries. So building revenues were also So holding revenues were also strong on strong on top of the operating top of the operating revenues. The other point, revenues.

Speaker #2: The other point, though, that counterbalances that though, that counterbalances that is that we is that we are we're pacing are we're pacing the the level of dividend accrual level of dividend accrual that we're upstreaming to that we're upstreaming to the group.

Speaker #2: group. So if you look at our So if you look at our first half performance in the parent first half performance in the parent bank, we've bank, we've generated generated around 5 billion around a billion of profit of profit and we've accrued and we've accrued about 3 and a half billion of dividends.

Speaker #2: about three and a half billion of dividends. So at this point, So at this point, that's that's reflective of our reflective of our managing managing the parent bank's on a the parent bank's on a consolidated basis tier consolidated basis tier one leverage one leverage ratio.

Speaker #2: Prudently. ratio. Prudently. So So the combination of stronger the combination of strong performance performance and some and the way we're and some and the way we're thinking about upstreaming to manage the tier one leverage ratio at the manage the tier one leverage ratio at the parent bank on a parent bank on a consolidated basis contributes consolidated basis contributes to the sequential growth in to the sequential growth of the parent bank's standalone capital the parent bank and the output ratio.

Speaker #2: ratio.

Speaker #4: Thanks.

Speaker #1: The The next question comes from the line of next question comes Kian Abu Hussein from JP Morgan. from from JP Morgan. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Yes. Good morning. I'm Yes. Good morning. Thanks for taking my taking my questions. First question is, and question. First question is, in both those are related to Asia are related to Asia, wealth.

Speaker #5: wealth. First question is related to First question is related to ODI. We worked in ODI. Will China which kicked in July the China which kicked in July the 1st, just trying to understand if it had an first trying to understand if it had an impact impact on your business and how you think on your business and how you think about ODI about ODI impact generally on your impact generally on your wealth wealth business in Hong business in Hong Kong in Kong, in particular.

Speaker #5: particular? And And then second then second question is related question is related to Hong to Hong Kong Kong again, where we see again, where we see material material growth in the affluent growth in the affluent and and also in the also in the high net worth high-net-worth segment where you are maybe segment where you are maybe not present, especially clearly not in not present, especially clearly not in the the affluent.

Speaker #5: Just trying to affluent. Just trying to understand if you have understand if you have any any ambition additional ambition to expand in that to expand in that area, considering the structural area considering the structural growth we're growth we're seeing in affluent, high-net-worth seeing in affluent high net worth Hong Hong Kong.

Speaker #5: Kong. Thank you.

Speaker #5: you.

Speaker #2: Thanks a Thanks a lot. Kian, for those questions. lot. Kian, for those questions. So So first on first on ODI, it's still ODI, it's still early, early, but based on what we're seeing but based on what we're seeing today in the conversations we had, today in the conversations we had, we we don't view the evolving don't view the evolving framework as a material constraint on framework as a material constraint on the the opportunity that we have, opportunity that we have, nor is it having nor is it having any any certainly immediate impact certainly immediate impact on flows.

Speaker #2: on those. We see those We see those developments primarily as more of an developments primarily as more evolution in transparency and reporting revolution and transparency and reporting requirements, in requirements, in particular, a consolidation of particular the consolidation of existing existing requirements with more focus requirements with more focus on enforcement on enforcement and and specifically on offshore, specifically on offshore online online brokers targeting brokers targeting mainland mainland investors. investors.

Speaker #2: So we don't see that as So we don't see that as a a real catalyst for change and real catalyst for change and affecting client demand affecting client demand for international diversification.

Speaker #2: for international diversification in a And it's totally not hitting through in our certainly not hitting through in our numbers. And I would just add that numbers.

Speaker #2: And I would just add that given given our cross-border our cross-border framework framework and our strong compliance and our strong compliance mindset, and discipline source mindset, and discipline source of of wealth standards, we also believe that we're wealth standards, we also believe that we're very well positioned to navigate very well positioned to navigate that evolving that evolving environment.

Speaker #2: In terms In terms of of the you asked the you asked about Asia flows about Asia flow and affluent and affluent ambition. Let me make a couple of ambition.

Speaker #2: Let me make a couple of points. points. The first, we're very So first, we're very pleased pleased with the position of our Asia with the position of our Asia franchise.

Speaker #2: franchise. In In addition to first half NNA addition to first half N&A and NNFCA and FGA, annualized growth of 7 and 10 percent annualized growth of 7% and 10% respectively, we're continuing to deliver respectively, we're continuing to deliver very very strong profitability and strong profitability and profitability growth.

Speaker #2: And we're also profitability growth. And we're also growing clients and client growing clients and client assets, assets, as well as broadening as well as broadening the the regional contributions to client regional contributions to client assets and profitability growth.

Speaker #2: asset and profitability growth. And And also, as I mentioned in my prepared also, as I mentioned in my prepared comments, we're broadening client comments, we're broadening client relationships and we're adding relationships and we're adding another dimension to our growth through another dimension to our growth through more recurring diversified revenue more recurring diversified revenue streams.

Speaker #2: This quarter, as I streams. This quarter, as I mentioned, mentioned, setting a record for mandate setting a record for mandate penetration in penetration in that part of the division.

Speaker #2: This quarter, as I streams. This quarter, as I mentioned, mentioned, setting a record for mandate setting a record for mandate penetration in penetration in that part of the division. division.

Speaker #2: And second, And second, Kian, Kian, we're not standing still. We're we're not standing still. We're investing selectively in areas. Such investing selectively in areas such as high-net-worth, advisor as high net worth, advisory capacity, particularly through digital capacity, particularly through digital and platform scalability, and platform scalability, to broaden our growth to broaden our growth opportunities.

Speaker #2: opportunities. So we So we believe that believe that the team is doing the right the team is doing the right things to continue to grow things to continue to grow fast.

Speaker #2: And we fast. And we don't don't see it as a trade-off between growth and see it as a trade-off between growth and profitability. We believe we can capture profitability.

Speaker #2: We believe we can capture both. In terms both. In terms of the wealth spectrum, that of the wealth spectrum, that is is also quite a focus also quite a focus for for the team, to continue to the team, to continue to invest, as I mentioned, in invest as I mentioned in high net high-net-worth and to drive worth and to drive that.

Speaker #2: At the that. At the moment, the mass affluent moment, the mass affluent is is less a focus, but we believe as we less focused, but we believe as we build build out out our our digital capabilities, that digital capabilities, that this is something that we can this is something that we can see moving see moving into the various into the various aspects aspects of the wealth spectrum, including of the wealth spectrum, including potentially the potentially the upper upper part of part of affluent.

Speaker #2: affluent.

Speaker #5: That's That's interesting. May I just ask you interesting. May I just ask you one one more as you talked about mandate more as we talk about mandate penetration and you mentioned that.

Speaker #5: penetration? You mentioned that. Were Where are we on mandate all the unmandate penetration in GWM? We haven't penetration in GWM? We haven't had an had an update for a update for a while.

Speaker #2: Well, Well, overall, we're now overall, we're now at sort of an all-time at sort of an all-time high across all of high across all of the the sectors.

Speaker #2: sectors. APAC has come a very long way. If you APAC has come a very long way. If you look at the time series, in terms look at the time series, in terms of mandate penetration and its of mandate penetration and its doubled in over the doubled it over the last two or three years, last two.

Speaker #2: The in terms of that, but in terms of that. So it really really is broadening is broadening out. Not out. Not only only the types the types of solutions that of solutions and bringing to bring clients, transaction-based, but also transaction-based, but also mandates, but as well mandates, but as well across the region.

Speaker #2: So there's more across the region. So there's more geographic ability within APAC as geographic diversity within APAC as well. So well. So we're broadening that out.

Speaker #2: we're broadening that out. We're broadening out the We're broadening out the revenue drivers. And so all revenue drivers. And so all that that speaks to quite a speaks to quite a broad bullish view on its growth view on its growth prospects.

Speaker #2: prospects.

Speaker #5: Thank Thank you.

Speaker #5: Thank you. The next question comes from the—

Speaker #1: The next question comes from the line line of Stefan Schallmann from Autonomous of Stefan Schallmann from Autonomous Research. Please go Research. Please go ahead.

Speaker #1: ahead.

Speaker #6: Good morning. Thank you very much for taking my Good morning. Thank you very much for taking my question. question. I wanted to start with you a very strong to start with a few more very strong performance in equities performance and equities trading.

Speaker #6: It's not quite as good as trading. It's not quite as good as the US banks, but it's better than the US banks. But it's better than what your European peers have reported—your European peers every quarter so far.

Speaker #6: And you've probably done quite so far. And you've probably done quite a a bit of benchmarking work around bit of benchmarking work around us.

Speaker #6: us. You can add a bit of color Maybe you can add a bit of color of of where you think you've done where you see you've done better or worse than others.

Speaker #6: Better or worse than others. Maybe where business meets our geographic presence, business makes more geographic differences, which play a role in explaining the relative performance versus peers.

Speaker #6: And the second question is about GWM, where you mentioned an $8.8 billion impact on investment assets from exiting certain markets or exiting certain services.

Speaker #6: Could you maybe explain what that relates to? Thank you very much.

Speaker #6: Could you, in explaining the relative performance versus your peers, maybe explain what that relates to? And the second question is about GWM. Where you mentioned an $8 billion negative impact on investment—is that from exiting certain markets or exiting certain services?

Speaker #6: much.

Speaker #2: Yeah. Hi, Yeah, hi Stefan. Stefan. So the latter one So the latter one was just an was just an exit in one part of our exit in one part of our business, a small part, business, a small part, relatively small part.

Speaker #2: relatively small part in so it impacted And so it impacted on AUM, on AUM. but because But because of of the exit didn't impact the exit impact on flows in on flows in the the quarter.

Speaker #2: In terms quarter. In terms of equity trading, of equity trading, and more color and more color there, I'd there, I'd say our say our geographical diversification really geographical diversification really across the across the IB is a IB is a differentiator for us.

Speaker #2: differentiator for us. And so And so we're strong really we're strong really across the globe. across the globe And with strong and with strong focus this past quarter, of focus this past quarter of course, at the being able to course, the being able to leverage the APAC opportunity that leverage the opportunity that was quite was quite evident in our evident in our results.

Speaker #2: But I think it is results. But I think it is the geographic diversity the geographic diversity that is a differentiator, I that is a differentiator, I would would say.

Speaker #2: say. And in our And our ability as I also ability as I also mentioned mentioned to stay close to to stay close to clients, the clients, relationships that we relationships that we have have developed and in our ability developed, and our ability to generate to generate revenue growth revenue growth without extending the without extending the balance balance sheet materially sheet materially really has been a differentiator really has been a differentiator for equities for equities trading.

Speaker #2: trading. And as well.

Speaker #6: Oh, sorry.

Speaker #2: Go ahead. No, go ahead. No, go ahead.

Speaker #2: ahead.

Speaker #2: ahead. Yeah.

Speaker #6: I just wanted to follow Yeah, I just wanted to follow up on the first point, please, the $8 up on the first point, please, the 8 billion.

Speaker #6: billion. Was that an exit from a particular Was that an exit from a particular geography, or was it more of a geography or was it more of a client client?

Speaker #6: group? And which And which geography would I find that geography would I find that in?

Speaker #6: in?

Speaker #2: We'll come back on the We'll come back on the details on that one, details on that one, Stefan. Stefan.

Speaker #6: Thank you very Okay. Thank you very much. much.

Speaker #1: The next question comes from The next question comes from the line of Auntie Rangan from the line of Anke Reingen from RBC. Please go RBC.

Speaker #1: Please go ahead.

Speaker #1: ahead.

Speaker #7: Yeah. Thank you very much for taking my Yeah, thank you very much for taking my

Speaker #3: questions. The first is on

Speaker #3: your internal quarter on your return or your

Speaker #7: capital fees that you're looking to exceed the target

Speaker #3: look to exceed the target or to a

Speaker #3: 2026 end for 2026.

Speaker #3: up while I understand you might not necessarily And while I understand you might not

Speaker #3: want to update—necessarily want to update from

Speaker #3: 2028 at this date. I'm just, 2028 at this stage, I'm just...

Speaker #7: wondering, based on my structured progress you made in

Speaker #3: progress you made in

Speaker #3: 2026 where you

Speaker #7: 2026, where you

Speaker #3: See, are you seeing potential upside? See, are you seeing potential?

Speaker #3: your 2028 upside for your 2028

Speaker #3: target or just try to target, or it's just try to

Speaker #3: Distinguish between cyclical versus, distinguish between successor versus.

Speaker #3: central progress on your structured progress, on your

Speaker #3: ROE? And then secondly,

Speaker #7: ROE? And then secondly,

Speaker #7: On Asia, I understand you don't want to comment on—

Speaker #3: I understand you don't want to comment on that.

Speaker #3: interactive in terms inter-quarter momentum,

Speaker #3: given some of the weakness in equity, but also given some of the weakness in

Speaker #3: markets in the equity markets in the

Speaker #3: region. Are you seeing this region? Are you seeing this?

Speaker #3: as a more material as a more material

Speaker #3: pattern to your equity, pattern to your

Speaker #3: performance as well in equity performance as well, than

Speaker #3: investment as well as in wealth management? Thank you. Investment bank as well as in wealth management?

Speaker #7: Thank you.

Speaker #3: you. Oh, thanks.

Speaker #2: Oh, thanks. Thanks, Anchor. Thanks. Anchor. So on the So on the returns, returns, we're obviously quite pleased with we're obviously quite pleased our performance and the momentum we're seeing about performance meant to be seeing across the across the business.

Speaker #2: business. We continue to have We continue to have confidence in our ability to confidence in our ability deliver against our to get our ambitions.

Speaker #2: With the first half performance that we've delivered, we delivered as we mentioned, we're well positioned to achieve was mentioned we're well positioned to achieve our our targets and scope targets with scope to to outperform.

Speaker #2: outperform. Beyond Beyond that, specifically in terms that, specifically in terms of of anything regarding anything regarding 2028, we'll update 2028, we'll update you you as part of our fourth quarter as part of our fourth quarter strategic strategic update early next update early next year.

Speaker #2: year. On your question around On your question around Asia, look, I Asia, look, I mean, the performance I'm mean, the performance I'm not not sure I fully took the sure I fully took the question, question, but the performance I but the performance I commented in response to Keene's commented in response to Keene's question question about about the positioning of the Asia wealth the positioning of the Asia wealth business, I think as business, I think as well, the IB and well the IB and Asia performed quite strong and as Asia performed quite strong and as Sergio mentioned in his comments, Asia Sergio mentioned in his comments, Asia was a standout was the standout regional regional performance.

Speaker #2: performance. So we see We see very strong continuing very strong continuing momentum. In momentum. In APAC and APAC and we're we're quite encouraged about the momentum quite encouraged about the momentum we're we're seeing in the outlook.

Speaker #2: I would seeing in the outlook. I would just just add one maybe one other add one maybe one other point to point to the prior question the prior question from from Stefan.

Speaker #2: Stefan, just one other Just in one other differentiator across differentiator across the equities the equities is is prime brokerage for prime brokerage for us.

Speaker #2: us. And the And the financing revenues that we've financing revenues that we've generated having even though we generated having even though we've didn't very discipline from a resource been very disciplined from a resource allocation perspective, I allocation perspective, I think the prime brokerage has think the prime brokerage has been one area that has also been one area that is also differentiating us from differentiating us from certain of our certain of our peers.

Speaker #2: peers.

Speaker #1: The next question The next question comes from the line of Andrew Combs comes from the line of Andrew Cook from from CT. Please go CT.

Speaker #1: Please go ahead.

Speaker #1: ahead. Good

Speaker #6: Good morning, Stefan. Follow up morning. Follow in a fresh question I up. First question that you can mentioned. On the equities, make. On the equity result, you we talked about having a diversified talked about having a diversified geographical mix, but you do geographical mix.

Speaker #6: But you do over-index in over-index in Asia versus your peers. And so that's a Asia. And clearly that's a very very strong second quarter strong second quarter because because of the index rebalancing that's of the index rebalance that's happened in Korea and to the lesser happened in Korea and to a lesser extent Taiwan extent Taiwan too.

Speaker #6: too. We're now seeing that reverse, so I assume that's quite a reversal. So I assume that's very beneficial for Q3 as well.

Speaker #6: beneficial for future as well. But Beyond that, how beyond that, how sustainable is the sustainable do you think the equities revenue equities strength is in revenue in Asia?

Speaker #6: And Asia? And then more broadly on net then more broadly on net money, it's very healthy print money, it's very healthy in Europe and Asia.

Speaker #6: in Europe and Asia, The US too. Can you US too. Can you just elaborate on how much of that, you just elaborate on how much of that you think, is cyclical think is cyclical related to the current IPO related to current IPO environment we're seeing?

Speaker #6: Versus environment you're seeing? Versus how how much of that is much of that is actually structural because actually structural because it's now integrated products now integrated but it's with a lot of the attrition raised a lot of the attrition of of our employees in the our employees in any case case you actually want to grow against those throughout the time where again regions.

Speaker #6: Thank everything's. Thank you. you.

Speaker #2: Yeah, thanks. Yeah, thanks. Andy. Andy. On the On the equities strain, equities strength, in Asia, in Asia, and the outlook, and the outlook, look, I think that is look, I think that is the benefit of the benefit of diversification.

Speaker #2: That we diversification. That we have have is that we're well positioned to is that we're well positioned to take advantage, for example, take advantage for example of strong equity of strong equity markets and client activity levels in markets with client activity levels in Asia.

Speaker #2: Asia. As we saw in the second As we saw in the second quarter, but of course, the depth of our quarter. But of course, the depth of our business business across across Europe as well as in the Americas allows us to Europe as well as in the Americas allows us to really take advantage of really take advantage of wherever there are strong markets.

Speaker #2: wherever there are strong markets. So So sure, sure, the very strong the very strong performance and volumes that we saw performance and volumes that we saw in Asia in the second in Asia in the second quarter and the first quarter for that quarter and the first quarter for that matter is unlikely to matter is unlikely to continue with that level, but we're well continue at that level.

Speaker #2: But we're well positioned to take positioned to take advantage just given our global advantage just given our global diversification. In diversification. In terms of terms of the wealth the wealth management question management question around whether it's cyclical or around whether it's cyclical or structural, I would structural, I would say that, of course, while say that of course wealth supportive markets have contributed and supported markets have contributed increasing share of the performance increasing share of the performance that that we have reflects we have reflects non-market factors.

Speaker #2: non-market factors. And this is giving me And this is giving me confidence around the durability confidence around the durability and and structural strength of our profitable structural strength of our profitable growth trajectory through the growth trajectory through the cycle in GWM.

Speaker #2: And cycle in GWM. And the the proof points that I've mentioned just a couple of proof points that I've mentioned this a couple of times times are our record mandate are our record mandate penetration, but also sustained penetration but also sustained transaction-based revenue, outperformance, transaction-based revenue outperformance lending momentum and also lending momentum, and also deeper client engagement through deeper client engagement the integrated delivery of through integrated delivery of more more and more one UBS and more UBS capabilities.

Speaker #2: capabilities. So on So on that, the structural versus cyclical that, the structural versus cyclical question, I do think question, I do think we're we're seeing and that is our seeing and that is our strategy is to push more and strategy is to push more and more into more into structural so that structural so that the performance that we the performance that we see is more see is more durable. durable.

Speaker #1: The next question comes from The next question comes from the line of Benjamin Goy from the line of Benjamin Goy from Deutsche Bank. Please go Deutsche Bank.

Speaker #1: Go ahead.

Speaker #6: Good morning. First, I think, from my side—morning. From my side, first, a different topic, a personal type of—I just want to close my call.

Speaker #6: Thank banking. The cost you. The cost-based base stable but silly down year on year just stable that came down during years 1 wondering now if the progress you've done through now, the progress you have done on on the integration, whether we should the integration was to expect a more meaningful expect a more meaningful step down on the cost step down now in base.

Speaker #6: Q3 going forward. And cost-based. Q3. Forward. And then another question on then another question on Asia wondering about your one Asia wondering what you bank strategy and what we can want strategy that we can comment on the visibility comment ability of what a pipeline of what a pipeline of of inflows also thinking about inflows or something about lookups lockups coming after the coming after the IPOs in these months and how IPOs in this month and how that could support your wealth management that could support your wealth management franchise franchise too.

Speaker #6: Thank too. Thank you. you.

Speaker #2: Yeah, Yeah, hey, Ben. On the second hey Ben. On the second one first, in terms one first, in terms of the lockup issue of the lockup into around IPOs, I think what's important around IPOs, what's important to underscore to underscore here is that here is that our GWM performance in our GWM performance in terms terms of growth of growth and asset and asset acquisition is not geared toward any acquisition is not geared toward any one thing.

Speaker #2: one thing. It's quite diversified It's quite diversified and it's across the board. And across the board. And so where there has been say a space so where there's been say a spade of IPOs, of of IPOs of course, that's helpful, we course that's helpful.

Speaker #2: We think, IPOs are think IPOs are foundational foundational to the outlook to the outlook in wealth management. With that said, in wealth management. With that said, for us, it's for us, it's not not something we're highly dependent something we're highly dependent on to drive growth.

Speaker #2: on to drive growth. And as a And as a result, of result, of course, course, if there are lockups if there are lockups post-IPO, we're post-IPO, we're not not pricing in any pricing in any downturn downturn in net new asset growth as in net new asset growth as a a result of that.

Speaker #2: On On the cost the cost side, so we continue to see side, so we continue to see meaningful integration-related meaningful integration related benefits coming through wealth benefits coming through wealth and P&C in the second and P&C in the second half. half.

Speaker #2: Including from Including from technology decommissioning, technology decommissioning, organization simplification, and organization simplification, and other integration other integration actions. We mentioned the strong actions. We mentioned the strong execution we had in the first execution we had in the first half, including in the second quarter, and half.

Speaker #2: Including in the second quarter. And that that has been some of these benefits were is meant that some of these benefits were realized earlier than we realized earlier than we had had previously previously expected. expected.

Speaker #2: And as I mentioned in my prepared And as I mentioned in my prepared remarks, at the same time we're selectively remarks, at the same time, we're selectively investing a portion of the investing a portion of the capacity capacity that we that we created created into technology and other into technology and other initiatives, initiatives, including select advisor including select advisor hiring.

Speaker #2: hiring. That supports That support growth, productivity, and growth, productivity, and attractive long-term return. attractive long-term return. So So for us, the clear for us, the clear guardrail remains our exit guardrail remains our exit 2026 underlying cost-income ratio 2026 underlying cost-income ratio target.

Speaker #2: And we remain firmly focused on target. And we remain firmly focused on delivering it. But as we finish delivering it. But as we finish out the integration, we out the integration, we should should still expect to see still expect to see further benefits further benefits on our OpEx on our OpEx line.

Speaker #2: line.

Speaker #5: Thank Thank you. Thank you.

Speaker #5: Thank you. Thank you. Thank you.

Speaker #1: The next The next question question comes from the line of Amit Goel from comes from the line UBank. Please go of. Go ahead. ahead.

Speaker #6: Hi, thank you. I've got some Hi, thank you. I've got some follow-up questions just on the follow-up questions just on the US US wealth wealth business.

Speaker #6: So one business. So one was was just just on your commentary about on your commentary about the flows the flows and, I guess, what we can and I guess what we can expect going expect going forward.

Speaker #6: forward. I suppose I suppose previously you said you expect the net previously you said you expect the net recruiting outflow impacts to recruiting outflow impact materially materially taper in the second half of this taper in the second half of this year.

Speaker #6: Is that still the case? I mean, just based on some of the data, it seems like in Q2—based on some of the data— is that still the case?

Speaker #6: It seems like in Q2 there was were still a lot of advisor outflows. still a lot of advisor outflows. So there could still be an So there could still be an impact into impact into Q3.

Speaker #6: And Q3. And then just when I'm looking then just when I'm looking at at the mix in terms of the mix in terms of in in the quarter, so the quarter, so the net new assets the net new assets were positive, but were positive, but then the net new then the net new fee generating fee-generating assets assets were negative.

Speaker #6: were negative. When When I look at Q2, in I look at Q2, in prior years, prior years, the the net new fee-generating assets have held net new fee generating assets have held up up better.

Speaker #6: better. Just wondering, what's Just wondering what's driving that dynamic? Was there anything in driving that dynamic? Was there anything in particular this quarter particular this quarter to to influence that?

Speaker #6: Thank influence that? Thank you.

Speaker #6: you.

Speaker #2: Yeah, hey Amit. So first, on the So first on the wealth headcount in the wealth headcount in the US, so just US, so just to orient, so to orient, we if you look at the we if you look at the table, we have two table, we have percent down year on year and one percent 2% down year on year and 1% down quarter on quarter, just to sort of down quarter on quarter just to sort of orient the point.

Speaker #2: orient the point. The other The other point that's important to point that's important to mention is mention is that the reported that the reported headcount, as I've headcount, as I've said, said, several times in the past, the reported several times in the past, the reported headcount numbers reflect the headcount numbers reflect a lag in timing because that's actually lag in timing because that's actually when the advisors come when the advisors either come on, when recruited or on when recruited or come come off, when they off when they move.

Speaker #2: move. Our payroll. Our payroll. So there So there is a lag in that. But I think is a lag in that. But I think what's important to the broader point I would what's important the broader point I would make is that we make is that we expect, as we work through the expect as we work through the issue, which we continue to issue, which we continue to do, do, that this will that this will have a tapering have a tapering impact which is why we have impact which is why we have been we've been been we've been forecasting and guiding on forecasting and guiding on positive net new assets for the positive net new assets for the year contributing year, contributing from wealth in the Americas.

Speaker #2: from wealth in the Americas. And so And so we expect the trend to continue we expect the trend to continue. And and would expect an would expect an improving second half improving second half as as well.

Speaker #2: But we are well. But we are continuing to maintain continuing to maintain that wealth in the Americas will be a that wealth in the Americas will be a positive contributor to positive contributor to net net new assets new assets in for the full year in through the full year 2026.

Speaker #2: In terms 2026. In terms of net new of net new assets assets versus NNFGA, nothing I versus net NFGA, nothing I would would call out.

Speaker #2: call out. I think I think the the in we've had very strong net new in we've had very strong net new fee fee-generating asset growth when you look generating asset growth.

Speaker #2: When you look back over the back over the last 12 months. I'd say last 12 months, I'd say I I wouldn't overread wouldn't read overread into one quarter versus the other in into quarter versus the other in terms terms of whether of whether there's we're indexed there's we're indexed more into net new fee-generating more into net new fee generating assets versus net new assets.

Speaker #2: So assets versus net new assets. So nothing I would take away or nothing I would take away or no one particular driver that I would call no one particular driver that I would call out out.

Speaker #2: In in explaining the delta between explaining the delta between the the two metrics, which is over two metrics, which is over time, they're time, they're both meeting our expectations both meeting our expectations and and that's really the more important that's really the more important point.

Speaker #2: point.

Speaker #6: Thank Thank you.

Speaker #1: The last question comes from the line The last question comes from the line of Joseph Speaker from Jeffrey. Please of. Go go ahead.

Speaker #1: ahead. Hi,

Speaker #7: Hi, thank thank you for taking my question and you for taking my question. And congratulations on a very robust congratulations on the very robust set of set of results.

Speaker #7: results. The The question I had is you've guided question I had is you guided the JWM the GWM NII to grow by around NII to grow by around 10% versus 10% versus 25.

Speaker #7: It's interesting that this number 25. It's interesting that this number is quite some ways is quite some ways ahead ahead of where the market expectations of where the market expectations are.

Speaker #7: Could you just kind of break are. Could you just kind of break that that down a little bit in terms down a little bit in terms of what is of what is rate rates versus volume or is this just, versus volume or is this just frankly, because we've seen a better result frankly because we've seen a better result in lending volumes and in lending volumes and deposit margins are deposit margins are remaining remaining robust or is it I guess robust or is it I guess what what I'm getting at is what element, if I'm getting at is what element any, differential in of a differential in interest rates or is it really on interest rates or is it really on volume?

Speaker #7: And volume? And then secondly, I then secondly, I guess strategically on asset guess strategically on asset management, is this a business that you management, is this a business that you are if are if you look you look at the business, it's not a large part of the at the business, it's not a large part of the group.

Speaker #7: I guess how fungible is it with the group. I guess how fungible is it with the group? group? It's been I think slightly It's been I think slightly underwhelming the past few quarters.

Speaker #7: Is this a underwhelming the past few quarters. Is this a business that you intend business that you intend to keep strategically? to strategically I I know there's know there's speculation over the years about it, speculation over the years about it, but any comments but any comments on on that business in the strategic rationale that business in the strategic rationale of of the rest of the group would be great.

Speaker #7: Thanking the rest of the group would be great. Thank you.

Speaker #7: you.

Speaker #2: Hey, Joe, let me Hey Joe, let me address the first question. So address the first question. So on GWM, on GWM, I I did mention that did mention that the guidance that I the guidance that I offered around 10% up year on offered on the 10% up year on year year was in part was in part supported by higher rates, but supported by higher rates, but also lending also lending growth and also growth and also favorable deposit mix.

Speaker #2: favorable deposit mix. So to really breaking that down, I So to really breaking that down, I would would say that moderately say that moderately higher dollar higher dollar rates has we're now rates as we're now looking now that our outlook looking now that our outlook would suggest moderately higher US would suggest moderately higher US dollar dollar rates, that creates structural rates, that creates structural tailwind for tailwind for the the business.

Speaker #2: business. And that comes from the yields And that comes from asset yields from from loans and also our loans and also our replicating portfolio.

Speaker #2: replicating portfolio. As those As those yields. We're yields climb higher and we're only only partly upset by partially offset by higher higher deposit costs that are deposit costs that are tempered tempered by our by our deposit deposit mix remaining healthy.

Speaker #2: So mix remaining healthy. So that's the way I think about it that's the way I think about it and drives and drives the the revised year-on-year revised year on year growth.

Speaker #2: look.

Speaker #7: Great. That's great, that's helpful. Helpful.

Speaker #2: Yeah, on Yeah, on that. that. So on asset management, I would say So on asset management, I would say that first of all, I think from a strategic that first of all, I think from a strategic standpoint of view, if it's very standpoint of view, well that.

Speaker #2: To thematic thematic of us being an asset-gathering of an asset gathering center organization, also if I look center organization, but also if I look at what we at what we do do within asset management, first of within asset management, first of all, I would like to all, I would like to highlight highlight that the good that the good momentum in momentum in we shaped reshaping and restructuring the business, our production basically imposing activities that physically posing activities that were quite diluted to our cost were quite diluted to and come ratio and really our ratio and really get getting focused with a good into focus with a good progress towards progress towards achieving a achieving a strong relative strong relative performance performance vis-à-vis our peers.

Speaker #2: also vis-à-vis our peers. When I When I look at within look at within that, I see a lot that, I see a lot of potential for us to continue to of potential for us to continue to grow.

Speaker #2: First of all, when you look at growth—first of all, when you look at our alternative space—we are, in our alternative space, a top LP in alternatives.

Speaker #2: First of all, when you look at grow. First of all, when you look at our alternative space, we are our alternative space, we are a top top LP in alternatives. LP in alternatives.

Speaker #2: You saw the good inflows during the quarter and good inflows during the quarter and the the good momentum. good momentum, we are having. We We are also are also developing developing strong focus strong focus capabilities on passive capabilities on passive, the ETFs.

Speaker #2: ETFs, And so from a geographic and so from a geographic standpoint of view, we are expanding our point of view, we are expanding our capabilities capabilities also our joint ventures also our joint ventures with external partners.

Speaker #2: with external partners. So I'm So I'm very happy to see the good very happy to see the good momentum which I momentum which I believe justify believe justify us continue to invest in this business.

Speaker #2: us continue to invest in this business. And And position it as a strategic element positioning as a strategic element of of our asset-gathering our asset gathering center story.

Speaker #2: center. So I think So I think it's an integral part of our it's an integral part of our equity ETF story.

Speaker #7: Thank Thank you.

Speaker #7: you.

Speaker #1: We have no further We have moved to other questions. So we'd like to questions. So I would like to close close the call and thank everyone for the call and thank everyone for dialing dialing in and asking their questions today.

Speaker #1: in and asking their questions today. And we And we look forward to updating you with our third look forward to updating you with our first quarter results and wishing quarter results and wishing everyone a good summer holiday.

Speaker #1: Everyone, have a good summer holiday. Thank you.

Speaker #1: you.

Speaker #8: Ladies and gentlemen, the webcast Ladies and gentlemen, the webcast and and Q&A schedule for panelists and Q&A session for analysts and investors is over.

Speaker #8: investors is over. You may now disconnect your You may now disconnect your lines. We will now take lines. We will now take a a short break and continue with the media Q&A session at 10:45 Q&A session at 10:45 EST.

Q2 2026 UBS Group AG Earnings Call

Request DemoDemo

UBS

Earnings