UBS Group AG (Holding Company); UBS AG (Lead Bank)

The stable outlooks on UBS AG and other core operating entities reflect our view that a one-notch downward revision of the group stand-alone credit profile (SACP) to 'a-' is unlikely to affect the ratings on these core entities. This is due to UBS' high additional loss-absorbing capacity (ALAC) buffer and the additional notch of ALAC uplift that would be available in this scenario. Our ratings on hybrid capital instruments issued by UBS AG would likely be affected if we revised down the group SACP, since they are directly linked to it. The developing outlook reflects uncertainty over the strategic positioning and importance of each Credit Suisse entity in the UBS group structure. S&P Global Ratings would look to resolve the

...We see material execution risk in UBS' integration of Credit Suisse. Risks arise primarily from the size and weaker credit profile of Credit Suisse, a more aggressive risk culture, and particularly from the complexity of winding down a large part of Credit Suisse' investment banking operations. However, in our view, the bad-will booked in connection with the takeover of Credit Suisse will enable UBS to accelerate the wind-down of legacy assets and effectively limit the financial costs of the integration. UBS is set to report second quarter results on Aug. 31, 2023, and we expect the group to address many strategic aspects at that point. For more information, see "Various Rating Actions Taken On Credit Suisse And UBS Group Entities After Merger Completion," published on June 12, 2023. We also recognize UBS' strong track record in delivering its strategic and financial targets Therefore, in our base case, we expect UBS to prudently manage and execute the integration with Credit Suisse. The...

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