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1. Company Snapshot

1.a. Company Description

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide.It operates through four divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, and Investment Bank.The Global Wealth Management division offers investment advice and solutions, and lending solutions to ultra high net worth and high net worth clients.


This segment also provides estate and wealth planning, investing, philanthropy, corporate and banking, and family advisory services, as well as mortgage, securities-based, and structured lending solutions.The Personal & Corporate Banking division provides personal banking products and services, such as deposits, cards, and online and mobile banking, as well as lending, investments, and retirement services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, trade and export finance, and global custody solutions, as well as transaction banking solutions for payment and cash management.The Asset Management division offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services.


The Investment Bank division advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; and offers clients differentiated content on major financial markets and securities.The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014.UBS Group AG was founded in 1862 and is based in Zurich, Switzerland.

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1.b. Last Insights on UBSG

UBS Group AG's recent performance was driven by strong Q2 earnings, beating estimates with a net profit of $2.4 billion. The company's integration of Credit Suisse remains on track, with invested assets reaching $6.6 trillion. A Fitch outlook upgrade to Positive cites smooth integration, rising profitability, and strong capital and liquidity metrics. Additionally, UBS's solid capital position and decreasing expenses contributed to its positive performance. The company's CEO, Sergio Ermotti, sees a brighter outlook, despite regulatory uncertainty.

1.c. Company Highlights

2. UBS Beats Expectations with Strong Q3 Earnings

UBS reported a robust third-quarter performance, with a net profit of $2.5 billion, up 74% year-over-year, and earnings per share (EPS) of $0.76, significantly surpassing analyst estimates of $0.3924. The underlying pretax profit was $3.6 billion, a 50% increase on 5% revenue growth, driven by momentum in core businesses. The actual EPS came out at $0.612. The revenue growth was fueled by significant inflows in Global Wealth Management and Asset Management, with invested assets reaching nearly $7 trillion.

Publication Date: Nov -25

📋 Highlights
  • Strong Net Profit Growth:: UBS reported Q3 net profit of $2.5 billion (+74%) and EPS of $0.76, driven by 50% underlying pretax profit growth to $3.6 billion on 5% revenue increase.
  • Global Wealth Management Success:: Delivered $1.8 billion pretax profit (+48% in APAC) and $38 billion net new assets, achieving 3.3% annualized growth with invested assets near $7 trillion.
  • Cost Savings Ahead of Schedule:: Achieved $10 billion cumulative gross run-rate cost saves, $900 million in Q3 alone, 1 quarter ahead of target, with 40% of remaining $3 billion from technology efficiencies.
  • Investment Bank Momentum:: Pretax profit surged to $787 million (+100% YoY) with 23% revenue growth to $3 billion and 17% return on attributed equity, driven by broad regional performance.
  • Capital Position Strengthened:: CET1 capital ratio at 14.8% and CET1 leverage ratio at 4.6% above targets, with tangible book value rising 2% to $26.54 and 9-month underlying RoCET1 at 14%.

Segment Performance

The Global Wealth Management division was a standout, delivering a pretax profit of $1.8 billion, with Asia Pacific (APAC) reporting a 48% increase in pretax profit. The division saw net new assets of $38 billion, representing a 3.3% annualized growth rate. Asset Management also performed well, with a pretax profit of $282 million, up 19%, driven by performance fees that nearly doubled to $87 million.

Cost Savings and Capital Position

UBS achieved $900 million of incremental gross run-rate cost saves in the quarter, reaching a cumulative total of $10 billion, one quarter ahead of schedule. The CET1 capital ratio was 14.8%, and the CET1 leverage ratio was 4.6%, both above target levels, indicating a strong capital position. The tangible book value per share grew sequentially by 2% to $26.54.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.33 (using the tangible book value per share of $26.54), UBS's valuation appears reasonable, considering its strong capital position and return on equity (ROE) of 7.21%. Analysts estimate next year's revenue growth at 3.7%. The dividend yield stands at 2.44%, providing a relatively stable return for investors. UBS's guidance suggests a positive outlook, with expectations to deliver on its 2025 objectives and provide more details on plans for 2026 in February.

Operational Highlights

The company is making progress in its strategic priorities, including the integration of Swiss operations, which is proceeding well despite some system issues. UBS is also focused on driving additional Investment Bank penetration and market share in the U.S. business, with success in this area. The company expects to upstream capital from its subsidiaries over the near to midterm, supporting its capital position.

3. NewsRoom

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UBS Declares Coupon Payments on 8 ETRACS Exchange Traded Notes

Dec -04

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Preferred Shares Are Great for Income. Choosing Among Them Is Getting Harder.

Dec -04

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Billionaires Are Ditching Private Equity Funds -- And Betting Billions on Direct Deals Instead

Dec -04

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Planet Earth has never had so many billionaires

Dec -04

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Participation notification by UBS Group AG

Dec -04

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There are more billionaires than eve. They have almost $16 trillion

Dec -04

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Checking In on the World's Billionaires

Dec -04

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Billionaires Still Like Investing in the U.S. Just Not as Much as Before.

Dec -04

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.59%)

6. Segments

Global Wealth Management

Expected Growth: 7.9%

UBS's wealth management segment is driven by increasing demand for private wealth management services, growth in global wealth, and expansion into emerging markets, positioning UBS as a leading global wealth manager.

Asset Management

Expected Growth: 10.3%

UBS Group AG's asset management services is driven by increasing demand from private, corporate, and institutional investors seeking diversification and risk management. The company's strong brand, global presence, and expertise in alternative investments will support growth.

Investment Bank

Expected Growth: 7.6%

Increasing demand for advisory and execution services in emerging markets, coupled with UBS Group AG's strategic expansion in equity, fixed income, currency and commodity markets, drives growth.

Personal & Corporate Banking

Expected Growth: 6.3%

UBS Group AG’s wealth management, investment banking services are expected to drive growth, driven by increasing high net worth individuals, corporate and institutional clients seeking diversified investment opportunities and strategic advisory services.

Non Core and Legacy

Expected Growth: 2.5%

UBS Group AG's Non-Core and Legacy segment growth is driven by strategic divestments, cost reductions, and improved operational efficiency, which will lead to a moderate growth rate.

Group Items

Expected Growth: 4.5%

UBS Group AG's non-allocated business divisions, such as wealth management, asset management, and investment banking, are expected to drive growth, driven by increasing demand for wealth management services and expansion into emerging markets.

7. Detailed Products

Wealth Management

Comprehensive wealth management services for high net worth individuals, including investment advice, portfolio management, and estate planning.

Investment Banking

Advisory and capital-raising services for corporations, governments, and financial institutions, including M&A, equity and debt capital markets, and leveraged finance.

Asset Management

Investment management services for institutional clients, including pension funds, insurance companies, and sovereign wealth funds.

Personal Banking

Retail banking services for individuals, including current and savings accounts, credit cards, and personal loans.

Corporate Banking

Cash management, trade finance, and lending services for corporate clients.

Markets

Sales, trading, and research services for institutional clients, including equities, fixed income, currencies, and commodities.

8. UBS Group AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for UBS Group AG is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of multiple financial institutions and the ease of switching between them.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the dominance of UBS Group AG in the financial industry.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the financial industry, including regulatory requirements and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple financial institutions competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 82.26%
Debt Cost 7.94%
Equity Weight 17.74%
Equity Cost 9.10%
WACC 8.14%
Leverage 463.58%

11. Quality Control: UBS Group AG passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HSBC

A-Score: 8.0/10

Value: 7.7

Growth: 7.3

Quality: 6.3

Yield: 8.8

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
BBVA

A-Score: 7.8/10

Value: 7.1

Growth: 9.2

Quality: 7.0

Yield: 8.1

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
NatWest

A-Score: 7.3/10

Value: 8.0

Growth: 5.6

Quality: 6.8

Yield: 8.1

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
ING

A-Score: 7.2/10

Value: 6.4

Growth: 5.7

Quality: 5.0

Yield: 9.4

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Barclays

A-Score: 7.1/10

Value: 9.0

Growth: 7.2

Quality: 5.8

Yield: 5.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
UBS

A-Score: 5.2/10

Value: 4.2

Growth: 4.0

Quality: 3.9

Yield: 5.6

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

31.72$

Current Price

31.72$

Potential

-0.00%

Expected Cash-Flows