UBS reiterates 15% underlying RoCET1 target by end of 2026

In it’s investor update highlights, UBS said, “Re-iterating ~15% underlying RoCET1 and less than70% underlying cost/income ratio exit rate targets by end-2026; well positioned to deliver long-term growth and higher returns with ~18% reported RoCET1 in 2028; Targeting USD ~13bn gross cost reductions by end-2026; ~50% of cumulative exit rate gross cost reductions expected by end-2024; Cost savings to provide necessary capacity for reinvestment to reinforce the resilience of our combined infrastructure as we absorb Credit Suisse and to drive sustainable growth; Ambition to surpass USD 5trn of invested assets in GWM by 2028, with USD ~100bn of NNA per annum through 2025, building to USD ~200bn per annum by 2028; NCL actively run down; underlying operating expenses expected to be USD less than1bn and underlying loss before tax expected to be USD ~1bn by end-2026; RWA expected to be around 5% of Group RWA; Optimizing financial resources to enable sustainable growth and higher returns; USD ~510bn of RWA expected by end-2026; expecting USD ~45bn of RWA reductions in NCL and USD ~15bn of business-led RWA reductions in core divisions from actions to improve capital efficiency; Basel 3 finalization and migrating Credit Suisse’s portfolios to UBS risk models are expected to increase RWAs in the core divisions by USD 25bn; Expecting up to USD 1bn of funding cost saves by 2026 relative to 2023 levels as a result of lower funding needs, diversified and more stable funding sources, and disciplined deposit pricing; Merger of UBS AG and Credit Suisse AG planned to be completed by the end of 2Q24 and merger of UBS Switzerland AG and Credit Suisse AG entities planned before the end of 3Q24, which is a critical step in enabling us to unlock the next phase of the cost, capital and funding synergies we expect to realize in 2025 and 2026; Delivering attractive capital returns; planning to reinstate share repurchases after completion of UBS AG and Credit Suisse AG merger, with up to USD 1bn in 2024, committed to progressive dividends and accruing for a mid-teen percentage increase in the dividend per share for 2024; ambition for FY26 share repurchases to exceed FY22 levels.”