Okay. Thank you, everyone. Thank you for joining us this morning. My name's Amit Goel. I co-head the European Banks team for Barclays, and I'm delighted to have Sarah Youngwood here with us from UBS. Sarah is Group CFO and a member of the Group Executive Board, and recently joined from JP Morgan, where she held a number of roles over a significant period of time. With that, maybe I'll kick off. Sarah, what are your first impressions of UBS since joining? Well, first of all, welcome, everybody, and thanks for having me here, Amit. My first impressions, I'll summarize them maybe in three words. People, Platform, and Purpose. The people are extraordinary at UBS, and this was really important to me and to my decision to join. There is a fantastic leadership team that has a great mix of geographic capabilities, as well as the support of an extraordinary board. On platform, well, you know that we have a $4 trillion ecosystem for investing. We have a truly global bank with three domestic markets, and I think of it as the U.S. That's 40% of our revenue. You look at Switzerland, and that's of course with its adjacencies in EMEA. In Switzerland, we are the most digital bank, as well as the number one investment bank. In APAC, we are also number one in equities, number one in wealth management, as well as big as twice the second one, and so very great franchise there. When you think about it, three words for me, people, platform, purpose. Purpose, that's the last one. Purpose is super important because, when I joined, I thought about it as, I want to do something that's good for the better world. I want to connect people for investing. I want to reimagine. What's fantastic at UBS is that actually found a way to be pragmatic about it. If you want to have purpose, you need to earn the right to have purpose. You need to be pragmatic about the foundations, the capital, the liquidity, the expense, the regulation, and we do that balance really well. I really like both the foundations we have, as well as the purpose. On a personal front, I do like diversity and inclusion and the fact that we're very strong in sustainability. Thank you. One of the key features within all the meetings we've had in the conference has been discussion on the broader macro environment. Mm-hmm. Clearly for UBS, a key focus as well. You know, with rates rising rapidly across the world, alongside inflation reaching highs that we, you know, we haven't seen for generations, and also heightened fears of recession and geopolitical risk, how does UBS think about the global economy going into 2023? You said it well, it is slowing down. It's slowing down because you've got the COVID tailwinds that are now dissipating. You have some of the quarantines that are still left, particularly in APAC and in China. You've got, of course, inflation and an energy crisis, particularly in Europe. At this point with some of the recent event, it could even be a volume crisis, despite the fact that the price is being held by the government. With that, the central banks are very focused on the inflation. They are willing to put the economy in a mild recession if that's what it takes to curb that inflation. With that, we're seeing very strong recent actions and increasingly hawkish language too. With that, our CIO predicts a recession for both Europe and the U.K. For Switzerland, actually, you've got an exception there, where the inflation is quite contained and the economy should be able to narrowly avoid a recession. The U.S. is actually doing better. You're seeing stabilization in the data in the U.S. for inflation, and employment has remained very strong. U.S. should remain in positive territory. In APAC, the long term is still for us a target rate of 5%. The timing is really the question given the current quarantines and the impact of the delays in the recovery in the property sector. Okay. Thank you. You know, what does this macro environment mean for UBS? And how are your clients reacting to this today? First of all, for UBS overall, we start with a position of strength, strong capital, strong capital returns, strong return of capital, and a balance sheet for all seasons. You take them one by one, 14.2% CET1 capital, return of capital. You've seen the announcement this morning. We are highly capital generative. In terms of the return on capital year to date, we are at 19%, and that's the same 19% for the second quarter. The balance sheet is 94% collateralized, and that is at 55% loan to value. That's like the place you start with. What are clients, you asked me about the clients, are doing about that, they are cautious, obviously, given what's going on in the world. That's translating into less transactions and like less recurring revenues. Our flows remain positive. In terms of what is happening, it follows pretty nicely what I just talked about in terms of the recession. Basically, U.S. and Switzerland doing better. APAC long term, but right now still deleveraging and Europe and the U.K a bit more in a difficult partial situation. Then you look at NII obviously benefiting, and we'll talk about that later. IB Q3 is really a continuation of what you've seen in Q2 with continued and even higher macro volatility and correlation being higher too. You're seeing the wallet continuing to be very down for the industry, whether it's advisory or capital markets. The pool is just really down. In terms of the LCM, I would note that we are not seeing any material issue in our LCM portfolio this quarter, and we remain conservatively positioned. When you put all of that for IB, it's performing as you would expect given these factors our mix, our geography and seasonality. You put all that together and you would say, with a good first half of the year, still expecting to be within our cost income as well as return on CET1 target for the year, and continuing to be defensively positioned and well-positioned with our strong balance sheet. Okay. Thank you. You touched on it on net interest income. In Q2, the group delivered a bit less than I think what the market was anticipating. How would you characterize the NII performance to date? I think about it in three dimensions. Volume, then what's happening in the markets, the rate changes, and then the repricing. On volume we have seen $370 billion of outflows in the industry. That is the largest Q on Q decrease we have seen since we've got the data since I think 2007. In that context, and with our wealth management peers being down 8% sequentially, we were down 6%. I would say happened to us too, but very much in line with what you would have expected. I actually think that sounds like a good outcome when you think about the fact that we really don't have the enhancements we are now making to our banking platform to have really more of the cash flows accounts, the ones that are really sticky. So that's the volume side. On the rate, obviously, we have the benefit of what's happening thanks to the central bank changes. Then in terms of repricing, the repricing itself is lower than what we had modeled with of course, the offset being a mix and volume. So overall, we feel that we are performing as we would expect with volume being in line with what you would expect in that industry. At that time, with the very fast movements and mix volume and repricing being the consideration. Okay. Thank you. How should we think about NII development or the uplift for the rest of 2022 and into 2023? The way I think about it going forward is first of all, in the context of what I said about the macro. You start with the central banks are very much hawkish and increasingly so with the recent changes that you have seen. Everything is going faster than expected. I like to start with $400 million is what you have seen in our numbers. You've seen that for the first half of the year. You annualize that. That is $800 million run rate impact so far. There will be more in the second half of 2022, and there will be more in 2023. Why do I say that? The first thing you look at is I like to think about GWM and P&C and by currency. I'm going to refer to a disclosure you may have seen in our quarterly report, which is the NII sensitivity. I happen to think this one is quite helpful. If you go by place, the U.S. dollar first and then Switzerland and then euro. The U.S. dollar has gone extraordinarily fast from basically 0% at the beginning of the year to 3.5%-4%, which is going to be the beginning of next year. That's like much, much faster than expected. In that context, you're seeing basically repricing going faster than expected, which is normal, higher rates, higher repricing. That's just a normal phenomenon. When you look at the volumes and the mix, you also see as the pace goes faster, that's happening too. We talked about the $23 billion that we had Q on Q, and additional mix effect. You move to Switzerland. In Switzerland it's a different situation. We start at -75% and we're going to 125%. What's important is to spend as little time as possible in the less negative zone. Less negative zone is where we are now and where we're going to be until next week. Now it's actually quite good that it's just until next week. That is also faster than expected and in that case faster is better. When you look at what happens in that negative zone, we don't have some of the deposit fees that we had, and we also lose some of the SNB benefits that we were getting. When you try to quantify that, you go to that disclosure, and you can compare December versus June, and that will give you a sense for the magnitude of that. That was not in the run rate of the second quarter. You start by basically taking that, and then you have what you would expect, which is the impact of the rates going up and the mix and volume impact. Then in Europe there was much more happening than you would have thought, and it's happening fairly fast. Here again, that's a positive with the mix and volume coming through. When you take all that together, that goes back to the $800 million that we have in the run rate, more in the second half, more in 2023. Be careful to think about always the mix, the volume, and the Swiss short-term impacts. Got it. Thank you. Maybe shifting tack a little bit, moving on to the U.S. strategy. In the U.S. wealth management business, you've been investing in your tech platforms, and entering new client segments, to try and increase scale. How does the termination of the Wealthfront acquisition affect your plans, and how should we think about profitability of this business over the next kind of three to five years? We start with, we have $1.8 trillion in the largest and second fastest-growing market in the world. We like that position, and we think about the growth plans in terms of our clients. You start with our clients that are personally advised and the global family and institutional wealth, and then you move to the core affluent clients. I'll just organize my answer along those two lines. The first one is the core of our franchise. It's the personalized advice as well as the global family and institutional wealth. That is $1.6 trillion of the ecosystem, and that is more than half of the revenue of GWM overall. That is almost half of GWM's pretax margin. The growth plans we have actually to the point of profitability are to bring that margin higher. I'll think about it in terms of like, what do those clients need? They need a better platform. They need their advisors to have the right tools to deal with them and the right connectivity. They need a complete suite of products, including on the banking side. When you go back to 2019, so this didn't just start, we started really investing in the investment platform and in the advisor desktop. In fact, in the first quarter, we just came out with the option for advisors to adopt a new desktop. That has been adopted even though it was just an option by 95% of the advisors. That tells you that they like it. They like it. It is making them more productive with their clients. It's the tools that they need. It is not done. It is an agile development, so you're gonna see, between this year and the beginning of next year, about 80% of the pages that they need being addressed. Good progress on the platform. In terms of banking, we've talked about building and enhancing a core banking modern cloud-based platform. When you think about what this will enable us to do, it's really all of the cash flow management tools that we can continue to enhance for the clients to really want to learn. We have all of their life through UBS and not just... Right now, they give us 30-50% of their investment wallet and about 5% of their deposit wallet. They still do their cash flow management somewhere else, and we want to bring that in. We feel this is a great opportunity that is short to medium term with our clients. That's with our core clients. In terms of the affluent, that is where the Wealthfront transaction was gonna come in, and we are back to our organic plans. What we're thinking we want to do there is address the HENRYs, high earners, not rich yet. There is $6-8 trillion worth of wealth that is with HENRYs. What we're gonna do there is really address them in the way they want to be addressed and in the way we want to address them to be efficient, which is really digital first. Building tools that enable us to bring our UBS CIO capabilities, wealth management capabilities, to them through the power of digital first. We have hired actually for the banking side of it, Jeff Chaffman. You know that Naureen has joined us. We have good talent to execute all of those organic plans both on our core clients and on the core affluents. We are excited about the future plans in the U.S. Thank you. I mean, you touched on the technology. I mean, just more broadly, I mean, what were your first impressions of UBS's technology capabilities, and strategy, in that front, when joining? That was one of the things that I was expecting to be good, and it was indeed good. Come to understand that if you want to be a financial institution of the future, you've got to be a technology company with a banking license, and UBS is just that. I'll give you three examples. There are more, but Agile. Agile, as you know, is going from waterfall to close collaboration. We have 13,000 people today working in Agile, that will be 17,000, including the finance team, in October, and that will be 20,000 by the end of the year. When you think about the size of UBS, that is a very large proportion of our team going into Agile. What's good for shareholders about Agile is not just that it's better for the client, although that's important, but it's also that it is, efficiency right away. We are densifying engineers. For the teams that have moved to Agile, you are seeing 65% of engineering density in CDIO, and that is up 10 percentage points. When you think about the efficiency that represents on a 13,000 technology-strong team, that is beneficial. The second one that I wanted to talk about is the cloud. The cloud at UBS is 60% of our computing power. That is a lot with 30%, half of it, being in the public cloud. I mean, I've looked at lots of stats across the industry, and I was really impressed by those. When you think about why do we care? Is it just a fancy word? Well, it's scalability and therefore efficiencies. It's scalability and pooling resources and therefore more green. It is really important for the hiring that we want to do. If you want to attract top talent, you need to give them a way to develop that is modern. If you want them to be efficient, that is what the cloud provides us. Therefore it's better for our client again. Then the commissions. Once you put all of that modern infrastructure, you need to go to the last mile. That's something that we have done and will continue to do. We have decommissioned 2,000 since 2021, 800 applications. That's super important because when you take agile efficiencies, the cloud efficiencies, decommissioning and going to that last mile, that gives you both some of the tailwinds that you need to be able to stay in your cost income ratio. It enables you to be the face of your clients in a way you want to be seen, i.e., as a modern bank that helps them the way they want to be helped. Technology, very bullish on that for UBS. Okay, thank you. Do you think UBS has the right level of spend technology at present? Yeah, very much so. We're at 10% of the revenue, and if you look at that versus some of the best peers in financial institutions and not in financial institutions, that is a really good stat. It's not just a, "Okay, we're gonna spike this year at 10% and then we'll be at 3%, and then we'll be at 12%." No, it's a 10% that is consistent, and the consistency is super important to Agile, but it's also very important to delivering for our clients. That enables us to be across all of the dimensions you want to have, whether it is advice, whether it's data, whether it's client impact, et cetera. Okay, thank you. Changing tack again a little bit. Another key area of focus on cost. How are the macroeconomic developments and inflation impacting your approach at managing expenses? Do you have flexibility to offset any potential revenue headwinds and margin pressure? Lastly, are you making any changes to your strategic investment? Got it. Start with the numbers. The numbers are 1.7%, up for the expense, including FX effects and mitigation. Basically, reporting numbers up 1%. Many people tell us, "Oh, it's all FX effects," because we do have FX effects benefits, but if you actually exclude FX effects and mitigation, it is 1.7%. It's a good number. We have reiterated and continue to reiterate that we will be within our cost income ratio for the full year, both on a reported and on an underlying basis. How do we do that? The first thing is $1 billion of cost saves that were there before I arrived, but that we are continuing to deliver on. Last year that was $200 million of benefits. This year we are on track for the $400 million of benefits. That comes from some of the technology initiatives that I mentioned, but it also comes from some of the regional simplification and legal entity simplification. Then, you say, "Okay, inflation." We're not immune to inflation. We have a little benefit because we have a portion of our employees in Switzerland, but we are not immune. What do we do about that? Actually, first of all, we treat our people really well. I think that's super important. We have embraced the modern ways of working, and we have been very supportive to our employees way before COVID, during COVID, and continue to be. I think the loyalty and the tenure that you see is absolutely helping us attract and retain talent. We're also doing what you would expect. It's the T&E, it's the consultants, it's the outsourcing. They're all of the good tactics that we go to when we want to make sure that we manage our expense rigorously, and we're doing just that. When you take all that, do we need to do more, to your question, and actually slow down investment plans? We could. We have expense flexibility, but we don't see in our base case a need to do that. Of course, we remain focused on our cost income targets as we continue to make the decisions. Of course, we talk about the environment all the time, and we want to make sure that we continue to be nimble as we look at it. Okay, thank you. Now, just moving to capital and capital returns. Mm-hmm. I know at the release this morning, you expect share repurchases to exceed $5 billion in 2022, and you've increased the dividend accrual. Yep. I guess while you're running above your CET1 ratio target kind of guidance, you know, we are looking at potentially a weaker revenue environment and, you know, there are three impacts still to come in 2024. How should we think about buybacks for the remainder of the year and going into next year? Yeah. That was a question that you guys asked us at the second quarter earnings. We had planned on answering today. You could tell that we had strong excess capital, and we were at 14.2%, and you could tell also that we were ahead of plans in terms of the execution of the share repurchase. When you take those two things, we have continued. We are at $4.1 billion now in terms of the share repurchase. We felt that it was important to acknowledge that having had both the excess capital versus our 13% target as well as the capacity to do the share repurchase, we were gonna be above the $5 billion. On the dividend, we also have the capacity to do that, and so we're delighted to be able to increase it by 10%, from 50 to 55 and to increase the accrual to reflect that. When you think about the macroeconomic environment, as I went through it, we continue to believe that, given where we are and the excess capital that we have versus our target of around 13%, we will continue to have a progressive dividend and share repurchase next year. Thank you. Well, thank you for those responses. Just any final messages before we move to the audience response poll and then, after that, the Q&A. I'll start by saying I chose UBS because I liked their hands. I had a choice to be at UBS. I chose to be at UBS. I've been there now for about six months, and I like their hand. I like it even better. I like it in the short term because if I look at this environment, I want to be positioned with strong capital, strong return on capital, strong capital return, strong balance sheet, geographic diversification, and we have all of that. We have those NII tailwinds and expense flexibility. We also have great people and the ability to continue to be the place where they come and where they stay. When you look at it for the long term, hopefully you enjoyed the description of the growth plans I described for the U.S., but we also have what we have in APAC and what we have in Switzerland. We have growth plans. We have the ability to execute on them. We have the ability to generate consistent, attractive returns. We have the technology platform and resources that underpin all of that. When you take all that, we believe that we will close the valuation gap to our U.S. peers. You've got a management team that is here, including me, committed to delivering. Thank you. If we can turn to the audience response, questions, everyone should have the buzzer in front of them. First question, what would cause you to become more positive on UBS shares? Positive revenue surprise, greater cost savings, better asset quality, or stronger capital/higher dividend payouts? Okay. Positive revenue surprise here. We'll try. Yeah. More so than the higher dividend payout. Because we're already careful. Yes, exactly. You already announced it this morning. A second question. What do you expect to be the biggest influence on UBS's revenues in the coming 12 months? Volumes, pricing, policy rates, or fees and commissions? Okay. Policy rates. I mean, that's been a pretty unanimous response for every bank that's presented so far, but also, I guess in this case, some people responding volumes and fees and commissions position. We have the third question, please. How do you think about UBS's cost development versus expectations? Likely to beat due to cost-saving initiatives, likely to meet expectations, likely to miss due to cost inflation, or not sure, but would like to see some more cost-saving initiatives? Okay. There's a little bit of skepticism in this one. The next question, please. How do you see UBS positions on capital and dividends? Upside risks from better earnings in future years, upside risks from falling rates, downside risks from weaker earnings, and downside risks from rising regulatory requirements. Okay. Fairly unanimous. Mm-hmm Upside risk, better earnings. Please can we have the next. What are you most concerned about at UBS in the current macro environment? One, weaker revenue. Two, cost inflation. Three, deteriorating asset quality. Four, capital. Or five, none of the above. Expect UBS to be resilient in this environment. Okay. So a spread of responses. Mm-hmm. I guess for most banks it's been the asset quality that's been the kind of, you know, the most significant risk. That's one of the places where we're pretty good. Yeah, exactly. Okay, the next question, please. Where should management focus their energy in the next 12 months? Number 1, working on the U.S. strategy. Number 2, investing in the APAC region. Number 3, bolt-on acquisitions and business growth. Or number 4, cost optimization. Okay. We're working on it. Exactly. I don't know if there's anything there which really kind of surprised you, or if you've got any comments. Otherwise we can move to the audience. No. Okay. Nothing particularly surprising. Sure. Okay, let's go to the audience. If you do have a question, please raise your hand. I see one from [Dirk Becker]. Hi Dirk. Yeah, good morning. I wanted to come back to the Wealthfront termination of acquisition. Has this been driven by the fact that since the initial announcement of the deal, the role of the CFO and the chairman has changed? Does the new pair of eyes take a different view on paying $1.5 billion for 500,000 customers? The second question is, what do you intend to do with the 5% stake that you're now acquiring? Do you keep the door open or what do you intend to do with this 5% stake in Wealthfront? I'll start by saying that we're not commenting on the cause for the mutual termination. What I can say is that Wealthfront is a great company, and we're delighted to be making this investment in them and to continue to explore a relationship with them. The second thing I would say is that there is full alignment between the board and the GEB. That's really what I can say at this point on this. That's the investment that we are making, and we are making it because we believe it is a great company and we're looking forward to exploring potential partnerships. Okay. Thank you. Do we have any other questions in the room? From [Vincent Ryder] or [Daniel]? Just bring you through one second. Thanks for your presentation this morning. How do you feel about analysts baking in multiple years of buybacks into your. I mean, obviously you don't comment on forecasts, but can you be clear about your message on buybacks? My understanding is you lowered your dividend payout ratio and inserted the buyback flexibility to allow your business to move with changes in the economic environment. Many analysts have now forecast, I'm exaggerating, buybacks going out three, five years. Like you're a software company, and I appreciate your technology comments earlier, but you're not a software company. How do you feel about that? You start with the fact that we have a highly capital generative model. The reason for the increase in the dividend was because it's still- Sorry, you've pre your arrival. Yeah, no, I know what you're talking about. You guys lowered your dividend payout ratio. I'm going back. Correct. Mm-hmm. With the very strong capital generation that we have, when you looked at our payout ratio, in terms of dividend payout ratio versus others, it was very little. We felt that we would still have a good mix and a lot of flexibility if we brought it up in this progressive way. We continue to believe in it being progressive and in the share repurchase being an important component. When you look at the $5 billion for this year, it's a reflection of the excess capital at which we are, so exceeding it. We did not make particular commitments as to how much it would be over many years, it will be a reflection of being capital generative. What you want to think about is the capital priorities that we have. We always start with a balance sheet for all seasons. The balance sheet for all seasons includes the regulatory requirements. Of course, when we are in this position of being in excess, there is some excess capital to return to shareholders, which is exactly what we're doing. The second is investing for growth, and we've talked about our growth plan. The good news is that many of our growth plan are self-funded, but this is, of course, an important priority. The third one is the progressive dividend, and the fourth one is share repurchase. That has not changed, and so really it's just a matter of continuing to adjust to the capital generation that we have had and the excess capital level at which we are. Thank you. I think we're actually out of time now, so we'll close there. Thank you very much again, Sarah, for joining us. Thank you. I hope you enjoy your day at conference. Very much so. Thanks for having me.