UBS Group (NYSE:UBS) executives used a media call following the company’s fourth-quarter and full-year 2025 results and an investor update to address questions ranging from cost targets and capital movements to U.S. regulatory approvals, integration-related job reductions, and legacy Credit Suisse matters.
Cost ambition: sub-50% cost/income ratio pushed by rate headwinds
Asked about an ambition for an underlying cost/income ratio below 50% by the end of 2026, management stressed that Swiss franc interest rate conditions remain a constraint. The CEO clarified that “Swiss franc interest rate headwinds that have persisted since 2024, will delay the achievement of an underlying cost income ratio below 50% by the end of 2026.”
Capital upstreaming and buffers at UBS AG
The CFO also pointed to foreign-exchange-driven pressure on Tier 1 leverage ratios as a factor limiting additional upstreaming in the near term while maintaining “prudent buffers.” He said those FX headwinds are preventing the firm from upstreaming as much as it otherwise would have in order to bring the holding company’s equity double leverage ratio to around 100%, which management said aligns with pre-Credit Suisse acquisition levels.
In discussing the amount of capital that has been or can be upstreamed, executives emphasized that these movements were planned rather than “new discovered capital.” They said the group had upstreamed CHF 13 billion in 2024 and expects to upstream CHF 9 billion in 2025. Management attributed the speed of repatriation to de-risking progress and cooperation with foreign authorities, while cautioning against “double counting” these capital flows in any calculations around potential future requirements.
When asked about the commonly cited CHF 26 billion capital build figure tied to a potential Federal Council plan, management said quicker repatriation does not reduce that figure because the upstreamed capital was already incorporated in earlier planning assumptions—just expected to arrive later.
U.S. national bank charter: conditional-to-final approval expected within the year
On the U.S. licensing process, executives said they expect to move from conditional approval to final approval “during the year.” They characterized engagement with U.S. regulators, including the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, as “constructive,” and said final approvals depend on regulators being satisfied the bank is working toward “heightened standards” required for a national charter.
Market outlook: constructive conditions with potential for event-driven volatility
Management said the firm entered the year seeing broadly constructive markets, with equity markets showing “higher dispersion and lower correlation,” which they said supports trading conditions. They also described private client sentiment as “risk on,” while emphasizing the need for diversification across asset classes and geographies.
At the same time, executives warned that the potential for event-driven volatility remains high, pointing to recent developments across commodities, geopolitics, and “AI issues” as contributors to fragility. They said it is “too early to call” whether early first-quarter conditions will persist or change as the year progresses.
Integration issues: client retention, layoffs timing, and U.S. advisor attrition
Questioned about client losses during the migration process, the CEO said that in mergers—particularly when “you merge the two largest bank in any country”—some clients naturally diversify. He acknowledged some market share loss that was “expected,” while also noting that UBS exited certain relationships that were “absolutely not justifiable in terms of return on capital deployed.”
Despite the integration workload, he said UBS retained “the vast majority of the relationship and clients,” adding that the firm had expected larger outflows. He also expressed confidence that, once teams can focus more on growth, UBS will be able to show benefits from “the full franchise and a new platform.”
On staffing reductions, management pushed back on the premise that the process is disproportionately affecting former Credit Suisse employees, arguing that Credit Suisse had already begun a significant cost and headcount reduction program before the combination. The CEO said redundancies are managed under a “one team, one bank” approach and described outcomes as “very balanced” and “driven by meritocracy,” while emphasizing an effort to treat people fairly.
In response to questions about Swiss layoffs, management said reductions would begin in the first part of the year but would “probably” be weighted more toward the second half of the year and the early part of 2027. They highlighted efforts to reduce the need for proactive redundancies by redeploying staff, citing an example from the prior year where UBS filled “two-thirds” of open roles by reskilling and retraining employees who otherwise may have been reduced in force. Management said it does not provide guidance on total headcount, and reiterated that it manages costs and a broader set of KPIs, with progress visible quarter by quarter.
Separately, asked about the sale of O’Connor, the CFO said the loss booked reflected proceeds that were less than the cost basis. He added that the difference versus previously disclosed expectations earlier in 2025 was due to a change in the sale perimeter tied to events from late third quarter into early fourth quarter.
On the U.S. wealth business, executives discussed financial advisor attrition following changes to the compensation grid that were introduced to improve pre-tax margins and support “sustainable profitable growth.” Management said it expected some advisor movement and that it is still working through it, but insisted that how the firm addresses the situation “will not impact on the pre-tax margin” in terms of added costs.
Finally, management declined to provide the size of the bonus pool for last year, telling reporters to wait for the compensation report, while indicating it would be higher than the prior year.
About UBS Group (NYSE:UBS)
UBS Group AG is a Swiss multinational financial services firm that provides a broad range of banking and capital markets services to private, institutional and corporate clients. Headquartered in Zurich, UBS operates as a universal bank with a primary focus on wealth management, asset management, investment banking and retail and commercial banking in Switzerland. The firm serves high-net-worth and ultra-high-net-worth individuals, pension funds, corporations and institutional investors through a global network of offices.
Key business activities include global wealth management—offering financial planning, investment advisory, discretionary portfolio management and custody services—alongside asset management products for institutional and retail investors.
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