Press Release

DBRS Morningstar Confirms UBS AG’s Long-Term Ratings at AA (low), Stable Trend

Banking Organizations
November 17, 2020

DBRS Ratings Limited (DBRS Morningstar) confirmed the Long-Term Issuer Rating of UBS AG (the Bank) at AA (low) and the Long-Term Issuer Rating of UBS Group AG (UBSG or the Group), the top-level holding company, at A (high) At the same time, all the Short-Term ratings were confirmed at R-1 (middle). The trend on all the ratings is Stable. The Bank’s Intrinsic Assessment (IA) is AA (low) and the Support Assessment is SA1. The Group’s Support Assessment is SA3. See the full list of ratings in the table at the end of this press release.


The confirmation of UBSG’s ratings reflects its highly diversified business with a leading global wealth management franchise and strong global investment banking franchise. The ratings also reflect the strength of its banking franchise in its home country of Switzerland. Under the COVID-19 pandemic uncertain environment, UBSG has been able to further reinforce its global position in key businesses as reflected in strong revenue growth from Wealth Management, and its Investment banking arm posted strong results helped by higher client activity and high levels of volatility. UBSG’s ratings continue to reflect the Group’s strong asset quality and solid funding and liquidity position. DBRS Morningstar considers that the Group’s earnings generation should offset the negative economic impact from any fines from outstanding litigation cases and that therefore they should not affect the Group’s capitalisation materially.


An upgrade of the Long-Term ratings would require consistent strengthening of profitability across its core businesses, whilst maintaining moderate risk profile and sound capitalisation.

A downgrade of the Long-Term ratings could arise if litigation and reputational issues materially impact the capital position or if there is evidence of any material weakening of the core franchise and risk profile.


UBSG is amongst the largest international financial institutions globally and is the largest Wealth Manager globally by invested assets with a strong presence across regions (EMEA, Asia Pacific and the US) and a specific focus on the Ultra High Net Worth (UHNW) segment. The Group has a leading franchise in retail and commercial banking in Switzerland. The Group’s Investment Bank operation is well positioned in key businesses including advisory, equity underwriting and equities and FX trading, with particular strength in equity derivatives in EMEA and APAC. UBSG’s IB is focused on predominantly fee-based, advisory and client flow businesses.

UBSG's profitability is supported by resilient earnings generation capacity stemming from a well-diversified global mix of businesses. Despite COVID-19 operating environment UBSG's profitability remained strong, benefiting from strategic initiatives implemented to reposition its wealth management business whilst taking advantage of its investment banking franchise capability. We consider the Group's profitability is also benefitting from the different cost initiatives taken in the past few years.

UBSG reported net profit attributable to shareholders of USD 4.9 billion in 9M 2020, up 37% YoY, reflecting good revenue growth in its core Global Wealth Management (GWM) and the Investment Bank (IB) businesses. However, results were also influenced by higher credit provisions largely associated with the update of credit models with weaker macroeconomic assumptions amid COVID-19. The Group’s reported Return on Equity was 14.4% in Q3 2020, improved from 7.7% in Q3 2019. However, we note that revenue growth benefitted from one off capital gains as well as the high levels of volatility driven by COVID-19 which might not be repeated to the same extent in the future. IB revenues (excluding one-off gains) grew a notable 29% YoY in 9M 2020 driven by strong growth across all segments except advisory revenues, particularly in Fixed Income and Equity Sales and Trading, which benefitted from higher levels of client activity and elevated volatility. Revenues from GWM continued to grow, albeit at a slower pace than IB revenues, up 3% YoY in Q3 2020 and largely benefitting from strong growth of transaction fee based income. Operating expenses were up 5% in 9M 2020 YoY largely reflecting some one-off costs.

UBSG has a conservative risk profile that reflects the credit and market risk characteristics of its main businesses, especially in wealth and asset management. The Group’s asset quality remains strong despite some increase in stage 3 loans driven by COVID-19. The Group’s impaired loan ratio remained very low at 0.6% at end-3Q20 and broadly in line with the previous year. The Group’s funding and liquidity position is strong, supported by a large and stable deposit base, benefiting from its GWM business and the strength of its banking franchise in its home country. The Group has well-diversified funding sources across various markets, products and currencies. The Net Stable Funding Ratio (NSFR) stood at 117% at end-3Q20, above the prospective minimum 100% regulatory requirement.

UBSG's capital position is supported by strong internal capital generation and sound access to capital markets. The Group has strong risk-weighted regulatory capital ratios and a sound leverage position. The Group’s capital ratios remain at the high end of the global peer range. UBSG reported a fully-loaded Basel 3 CET1 ratio of 13.5% at end-Q3 2020 and the Group reported a fully-loaded CET1 leverage ratio of 3.8% at the end-Q3 2020 (4.2% when taking into account the temporary FINMA exceptions).

The Grid Summary Grades for UBS Group AG are as follows: Franchise Strength – Very Strong/Strong; Earnings – Strong; Risk Profile – Strong; Funding/Liquidity – Strong; Capitalisation – Strong.


DBRS Morningstar views Business Ethics and Corporate Governance as material rating factors for the Bank’s ratings, with these reflected in the Risk building block. UBSG’s operational risks, including reputational and litigation risk, are latent risks for UBSG as highlighted in outstanding cases, including the French tax case and the RMBS case in the US. In February 2019, a French court found the Group guilty of unlawful solicitation of clients on French territory and aggravated laundering of the proceeds of tax fraud and imposed fines of around EUR 4.5 billion on the Group. The Group has appealed the judgment and the trial which was originally set for June 2020 has been postponed to March 2021. The Group has provisioned EUR 450 million for this case and has total provisions for litigation, regulatory and similar matters of USD 2.0 billion at end-September 2020.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at:

DBRS Morningstar notes that this Press Release was amended on February 12 2021 to correct the name of the ESG factor to Corporate Governance within the ESG Considerations section.

All figures are in USD unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (8 June 2020).

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release:

The sources of information used for this rating include Company Documents, UBS Annual Reports (2015-2019), UBS Quarterly Reports (2015 Q1-2020 Q3), UBS Earnings Presentations (2015-2020 Q3), and S&P Global Market Intelligence. DBRS Morningstar considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

This is an unsolicited rating. This credit rating was not initiated at the request of the issuer.

With Rated Entity or Related Third-Party Participation: [YES]
With Access to Internal Documents: [NO]
With Access to Management: [NO]

DBRS Morningstar does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar's outlooks and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see:

The sensitivity analysis of the relevant key rating assumptions can be found at:

Ratings assigned by DBRS Ratings Limited are subject to EU and US regulations only.

Lead Analyst: Maria Rivas, Senior Vice President - Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director – Head of European FIG
Initial Rating Date: May 17, 2010
Last Rating Date: November 20, 2019

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