UBS Group AG

Leading franchises in domestic banking and global wealth management. Strong and stable strategy focusing on risk-adjusted returns from asset-gathering businesses. Capitalization that is stronger than that of most large global banks. Material unresolved litigation risk. Sizable weight of investment banking activity, which could create earnings volatility. The stable outlook on UBS Group AG and its operating entities indicates that S&P Global Ratings' combined view of UBS' capital and risks will remain a neutral factor over the next 12-24 months. We expect only gradual strengthening of capital from today's level, and are cautious given the uncertainty of the timing and impact of unsettled litigation cases. These uncertainties might decline over the next few years, however. UBS' unsupported group credit profile (UGCP)

...Outlook: Stable The stable outlook on UBS Group AG and its operating entities indicates that S&P Global Ratings' combined view of UBS' capital and risks will remain a neutral factor over the next 12-24 months. We expect only gradual strengthening of capital from today's level, and are cautious given the uncertainty of the timing and impact of unsettled litigation cases. These uncertainties might decline over the next few years, however. UBS' unsupported group credit profile (UGCP) of 'a' positions it as one of the most creditworthy commercial banks globally and the bank has a business model well placed to face future tougher regulations. Further improvements will depend on UBS consistently achieving its updated financial targets. We could revise our UGCP assessment upward, and possibly raise our ratings on UBS Group AG and its core operating companies, if the uncertainty associated with litigation charges reduces further and the group sustains a risk-adjusted capital (RAC) ratio well above...

Full Report