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

We think reaching its revised financial targets through the cycle (see table 1) will also depend on whether UBS manages to further expand its position in its growth markets, namely wealth management in Asia and the U.S., and whether the structural gross cost savings of US$1 billion are achieved despite inflationary cost pressure and intense competition for talents. S&P Global Ratings acknowledges a high degree of uncertainty about the extent, outcome, and consequences of the military conflict between Russia and Ukraine. Irrespective of the duration of military hostilities, sanctions and related political risks are likely to remain in place for some time. Potential effects could include dislocated commodities markets--notably for oil and gas--supply chain disruptions, inflationary pressures, weaker growth, and

...UBS' focus on asset-gathering business underpins the superior stability of its earnings and balance sheet. Its revenue pool is dominated by stable contributions from its leading wealth and asset management divisions, which generate favorable risk-adjusted returns (see charts 1 and 2). In addition, UBS' leading market position in the Swiss domestic banking market contributes to superior business stability and offsets some of the revenue volatility intrinsic to its investment bank operations. We principally compare UBS ('a' group SACP) with other large diversified banks and we consider Credit Suisse ('a-') and Morgan Stanley ('a-') to be the closest peers because, like UBS, they combine material wealth management and investment bank businesses....

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