Bond UBSL 0% ( DE000UE6XZA5 ) in EUR

Issuer UBSL
Market price 100 %  ▲ 
Country  Switzerland
ISIN code  DE000UE6XZA5 ( in EUR )
Interest rate 0%
Maturity 24/02/2025 - Bond has expired



Prospectus brochure of the bond UBS (London Branch) DE000UE6XZA5 in EUR 0%, expired


Minimal amount 1 000 EUR
Total amount 1 500 000 EUR
Detailed description UBS London Branch operates as a significant subsidiary of UBS Group AG, providing a wide range of investment banking, wealth management, and asset management services to clients in the UK and internationally.

The Bond issued by UBSL ( Switzerland ) , in EUR, with the ISIN code DE000UE6XZA5, pays a coupon of 0% per year.
The coupons are paid 1 time per year and the Bond maturity is 24/02/2025







REGISTRATION DOCUMENT
dated 12 October 2020
of
UBS AG
(a corporation limited by shares established under the laws of Switzerland)
which may also be acting through its Jersey branch:
UBS AG, Jersey Branch
(the Jersey branch of UBS AG)
or through its London branch:
UBS AG, London Branch
(the London branch of UBS AG)
or through its Hong Kong branch:
UBS AG, Hong Kong Branch
(the Hong Kong branch of UBS AG)
This document has been prepared for the purpose of providing disclosure information with regard to UBS AG
(the "Issuer", together with its subsidiaries, "UBS AG consolidated" or "UBS AG Group"; together with
UBS Group AG, which is the holding company of UBS AG, and its subsidiaries "UBS Group", "Group", "UBS"
or "UBS Group AG consolidated") as issuer of retail and wholesale non-equity securities and constitutes a
registration document (the "Registration Document") within the meaning of Art. 6 (3) of Regulation (EU)
No. 2017/1129 of the European Parliament and of the Council (the "Prospectus Regulation") in connection
with Art. 7 and Annex 6 (registration document for retail non-equity securities) of the Commission Delegated
Regulation (EU) No. 2019/980 of 14 March 2019 (the "Prospectus Delegated Regulation").


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TABLE OF CONTENTS
Page:

1. Risk Factors...........................................................................................................................................4
1.1.
Credit, liquidity and funding risks ................................................................................................4
1.2.
Market and macroeconomic risks ................................................................................................7
1.3.
Regulatory and legal risks ........................................................................................................ 10
1.4.
Strategy, management and operations risks ............................................................................. 15

2. Responsibility Statement ................................................................................................................. 19

3. Important Notices ............................................................................................................................. 19

4. Information about UBS AG .............................................................................................................. 20
4.1.
Introduction ............................................................................................................................. 20
4.2.
Corporate Information ............................................................................................................. 21
4.3.
Statutory Auditors .................................................................................................................... 21
4.4.
Credit Ratings assigned to UBS AG .......................................................................................... 21
4.5.
UBS's borrowing and funding structure and financing of UBS's activities ................................. 23

5. Business Overview ........................................................................................................................... 23
5.1.
Strategy, management and operations risks ............................................................................. 23
5.2.
Global Wealth Management .................................................................................................... 23
5.3.
Personal & Corporate Banking ................................................................................................. 23
5.4.
Asset Management .................................................................................................................. 24
5.5.
Investment Bank ...................................................................................................................... 24
5.6.
Group Functions ...................................................................................................................... 24
5.7.
Competition ............................................................................................................................ 24
5.8.
UBS AG consolidated key figures ............................................................................................. 24

6. Organisational Structure of UBS AG ............................................................................................... 27

7. Trend Information ............................................................................................................................ 27
7.1.
Material Adverse Change in the Prospects of UBS AG .............................................................. 27
7.2.
Significant Changes in the Financial Performance of the UBS AG Group .................................. 27
7.3.
Recent Developments .............................................................................................................. 27
7.4.
Trend Information .................................................................................................................... 30

8. Profit Forecasts and Estimates......................................................................................................... 31

9. Administrative, Management and Supervisory Bodies of UBS AG .............................................. 31
9.1.
Board of Directors .................................................................................................................... 31
9.2.
Members of the Board of Directors (as of the date of this Registration Document)................... 31
9.3.
Organizational principles and structure .................................................................................... 32
9.4.
Executive Board ("EB")............................................................................................................. 33
9.5.
Members of the Executive Board (as of the date of this Registration Document) ...................... 33
9.6.
Potential Conflicts of Interest ................................................................................................... 34

10. Major Shareholders .......................................................................................................................... 34

11. Financial Information concerning the Issuer's Assets and Liabilities, Financial Position and
Profits and Losses ............................................................................................................................. 34
11.1. Historical Annual Financial Information .................................................................................... 34
11.2. Auditing of Historical Annual Financial Information .................................................................. 35
11.3. Interim Financial Information ................................................................................................... 35
11.4. Significant Changes in the Financial Position of UBS AG Group ............................................... 36

12. Litigation, Regulatory and Similar Matters .................................................................................... 36
12.1. Inquiries regarding cross-border wealth management businesses ............................................. 37


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12.2. Claims related to sales of residential mortgage-backed securities and mortgages..................... 38
12.3. Madoff .................................................................................................................................... 39
12.4. Puerto Rico .............................................................................................................................. 39
12.5. Foreign exchange, LIBOR and benchmark rates, and other trading practices ............................ 40
12.6. Swiss retrocessions ................................................................................................................... 42

13. Additional Information .................................................................................................................... 43
13.1. Share Capital ........................................................................................................................... 43
13.2. Dividends ................................................................................................................................. 43

14. Material Contracts ............................................................................................................................ 43

15. Documents Available ....................................................................................................................... 43

Appendix 1 ­ Annual Report 2018 as at 31 December 2018 .......................................................................... A-1

Report of Independent Registered Public Accounting Firm ................................................... A-515-A-524

UBS AG Consolidated Financial Statements:
Income Statement .......................................................................................................................... A-525
Balance Sheet ................................................................................................................................. A-528
Statement of Changes in Equity .......................................................................................... A-529-A-532
Statement of Cash Flows ..................................................................................................... A-534-A-535
Notes to the UBS AG consolidated financial statements ....................................................... A-536-A-723

Appendix 2 ­ UBS AG Standalone financial statements and regulatory information for the year ended
31 December 2018 .............................................................................................................................. B-1

Income Statement .............................................................................................................................. B-5
Balance Sheet .............................................................................................................................. B-6-B-7
Statement of appropriation of total profit / (loss) carried forward ...................................................... B-9
Notes to the UBS AG standalone financial statements .............................................................. B-10-B-32

Report of the statutory auditor on the financial statements ...................................................... B-33-B-37

Appendix 3 ­ Annual Report 2019 as at 31 December 2019 .......................................................................... C-1
Report of Independent Registered Public Accounting Firm ................................................. C-489-C-497
UBS AG Consolidated Financial Statements:

Income Statement ........................................................................................................................ C-500
Balance Sheet .............................................................................................................................. C-503
Statement of Changes in Equity ........................................................................................ C-504-C-508
Statement of Cash Flows ................................................................................................... C-509-C-510
Notes to the UBS AG consolidated financial statements ..................................................... C-512-C-687

Appendix 4 ­ UBS AG Standalone financial statements and regulatory information for the year ended
31 December 2019 .............................................................................................................................. D-1
Income Statement ............................................................................................................................ D-3
Balance Sheet ............................................................................................................................ D-4-D-5
Statement of appropriation of total profit / (loss) carried forward ..................................................... D-6
Notes to the UBS AG standalone financial statements ............................................................. D-8-D-29

Report of the statutory auditor on the financial statements ................................................... D-31-D-33


Appendix 5 ­ UBS Group First Quarter 2020 Report ....................................................................................... E-1


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UBS Group AG Interim Consolidated Financial Statements (unaudited):
Income Statement .......................................................................................................................... E-10
Balance Sheet ........................................................................................................................ E-38-E-42
Statement of Changes in Equity ............................................................................................ E-64-E-65
Statement of Cash Flows ....................................................................................................... E-66-E -67
Notes to the UBS Group AG interim consolidated financial statements (unaudited) .............. E-67-E-101

Appendix 6 ­ UBS AG First Quarter 2020 Report ............................................................................................. F-1
UBS AG Interim Consolidated Financial Statements (unaudited):
Income Statement ........................................................................................................................... F-15
Balance Sheet ......................................................................................................................... F-18-F-19
Statement of Changes in Equity .............................................................................................. F-20-F-21
Statement of Cash Flows ........................................................................................................ F-22-F-23
Notes to the UBS AG interim consolidated financial statements (unaudited) ............................ F-24-F-58

Appendix 7 ­ UBS Group Second Quarter 2020 Report .................................................................................. G-1
UBS Group AG Interim Consolidated Financial Statements (unaudited):
Income Statement .......................................................................................................................... G-61
Balance Sheet ........................................................................................................................ G-64-G-65
Statement of Changes in Equity ............................................................................................. G-66-G-67
Statement of Cash Flows ........................................................................................................ G-68-G-69
Notes to the UBS Group AG interim consolidated financial statements (unaudited) ............... G-70-E-106

Appendix 8 ­ UBS AG Second Quarter 2019 Report .....................................................................................H-1
UBS AG Interim Consolidated Financial Statements (unaudited):
Income Statement .......................................................................................................................... H-16
Balance Sheet ........................................................................................................................ H-19-H-20
Statement of Changes in Equity ............................................................................................. H-21-H-22
Statement of Cash Flows ........................................................................................................ H-22-H-24
Notes to the UBS AG interim consolidated financial statements (unaudited) ........................... H-25-H-69

Appendix 9 ­ Information for the purposes of Art. 26 (4) of the Regulation (EU) 2017/1129 ......................... I-1







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1. Risk Factors
Investing in the retail and wholesale non-equity securities of the Issuer involves certain issuer-specific
risks. Investments in securities of the Issuer should not be made until all these risk factors have been
acknowledged and carefully considered. When making decisions relating to investments in the
securities of the Issuer, potential investors should consider the following material risk factors that are
specific to the Issuer and which may affect the Issuer's ability to fulfil its obligations under its securities
and, if necessary, consult their legal, tax, financial or other advisor.
Prospective investors in any securities of the Issuer should read the entire Registration Document and
the relevant summary and securities note, base prospectus or other prospectus, either incorporating
information from this Registration Document by reference or of which this Registration Document
forms part, containing disclosure on certain securities (and where appropriate, the relevant summary
note applicable to the relevant securities) in order to obtain all the relevant information.
Certain risks, including those described below, may affect UBS AG's ability to execute its strategy or its business
activities, financial condition, results of operations and prospects. A broad-based international financial services
firm such as UBS AG is inherently exposed to multiple risks, many of which may become apparent only with the
benefit of hindsight. As a result, risks that UBS AG does not consider to be material or of which it is not currently
aware could also adversely affect UBS. Within each category, the risks that UBS AG considers to be most material
are presented first.
The Issuer has assessed materiality on a qualitative basis considering potential magnitude of the
negative effects on the Issuer from the occurrence of a risk and the probability of occurrence of that
risk. The Issuer believes the risk factors described below represent the principal risks inherent in
investing in securities issued by UBS AG as Issuer, but additional risks and uncertainties that are not
presently known or that the Issuer currently believes are not material may also adversely affect its
ability to execute its strategy or its business activities, financial condition, results of operations and
prospects. If any of the risks actually occur, the business, results of operations, financial condition and
prospects of the Issuer and the UBS Group could be materially adversely affected.
1.1. Credit, liquidity and funding risks
In this risk category, the two risk factors presented first are the most material in the assessment of the Issuer as
of the date of this Registration Document.
Credit risk in relation to UBS AG as Issuer
Each investor in securities issued by UBS AG as Issuer is exposed to the credit risk of UBS AG, including the risk
that UBS AG cannot meet its obligations under the securities issued, on time or in full, and holders of securities
may suffer a substantial or total loss on the securities. Adverse changes in the actual or perceived credit risk of
UBS AG may also adversely affect the market value of securities.
The assessment of UBS AG's creditworthiness may be affected by a number of factors and developments. These
include:
· The spread of the coronavirus disease (COVID-19) pandemic and the governmental measures taken to
contain the pandemic, which have had, and will likely continue to have, an adverse effect on UBS AG's
results of operations and financial condition.
· Changes in market and macroeconomic conditions. Adverse changes in interest rates, credit spreads,
securities prices, market volatility and liquidity, foreign exchange rates, commodity prices, and other
market fluctuations, as well as changes in investor sentiment, can affect UBS AG's earnings and
ultimately its financial and capital positions.
· UBS AG's credit risk exposure to clients, trading counterparties and other financial institutions, which
would increase under adverse economic conditions.
· Low and negative interest rates, which could continue to negatively affect UBS AG's net interest income.
· UBS AG's plans to ensure uninterrupted business dealings as the UK withdraws from the EU may not be
effective.
· Currency fluctuation.


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· Material legal and regulatory matters. UBS AG is subject to a large number of claims, disputes, legal
proceedings and government investigations, and it expects that its ongoing business activities will
continue to give rise to such matters in the future. The extent of UBS AG's financial exposure to these
and other matters is material and could substantially exceed the level of provisions that UBS AG has
established. UBS AG is not able to predict the financial and non-financial consequences these matters
may have when resolved.
· UBS AG's financial results may be negatively affected by changes to assumptions and valuations, as well
as changes to accounting standards.
· If UBS experiences financial difficulties, FINMA has the power to open restructuring or liquidation
proceedings or impose protective measures in relation to UBS Group AG, UBS AG or UBS Switzerland
AG, and such proceedings or measures may have a material adverse effect on UBS's shareholders and
creditors.
· Substantial changes in regulation, which may adversely affect UBS AG's businesses and its ability to
execute its strategic plans.
· UBS AG's stated capital returns objective is based, in part, on capital ratios that are subject to regulatory
change and may fluctuate significantly.
· The effect of taxes on UBS AG's financial results is significantly influenced by tax law changes and
reassessments of its deferred tax assets.
· Discontinuance of, or changes to, benchmark rates may require adjustments to UBS AG's agreements
with clients and other market participants, as well as to UBS AG's systems and processes.
· UBS AG may not be successful in the ongoing execution of its strategic plans.
· Operational risks affect UBS AG's business. UBS AG's operational risk management and control systems
and processes are designed to help ensure that the risks associated with its activities - including those
arising from process error, failed execution, misconduct, unauthorised trading, fraud, system failures,
financial crime, cyberattacks, breaches of information security, inadequate or ineffective access controls
and failure of security and physical protection - are appropriately controlled. If UBS AG's internal controls
fail or prove ineffective in identifying and remedying these risks, UBS AG could suffer operational failures
that might result in material losses.
· UBS AG may not be successful in implementing changes in its wealth management businesses to meet
changing market, regulatory and other conditions.
· UBS AG may be unable to identify or capture revenue or competitive opportunities, or retain and attract
qualified employees.
· UBS AG depends on its risk management and control processes to avoid or limit potential losses in its
businesses.
· UBS AG's operating results, financial condition and ability to pay its obligations in the future may be
affected by funding, dividends and other distributions received from UBS Switzerland AG, UBS Americas
Holding LLC, UBS Europe SE and other subsidiaries, which may be subject to restrictions.
· New events that cause reputational damage, which could have a material adverse effect on UBS AG's
results of operation and financial condition, as well as its ability to achieve its strategic goals and financial
targets.
· Liquidity and funding management, which are critical to UBS AG's ongoing performance. The viability
of UBS AG's business depends on the availability of funding sources, and its success depends on its
ability to obtain funding at times, in amounts, for tenors and at rates that enable it to efficiently support
its asset base in all market conditions.
If UBS experiences financial difficulties, FINMA has the power to open restructuring or liquidation
proceedings or impose protective measures in relation to UBS Group AG, UBS AG or UBS Switzerland
AG, and such proceedings or measures may have a material adverse effect on UBS's shareholders and
creditors
Under the Swiss Banking Act, FINMA is able to exercise broad statutory powers with respect to Swiss banks and
Swiss parent companies of financial groups, such as UBS Group AG, UBS AG and UBS Switzerland AG, if there
is justified concern that the entity is over-indebted, has serious liquidity problems or, after the expiration of any
relevant deadline, no longer fulfils capital adequacy requirements. Such powers include ordering protective
measures, instituting restructuring proceedings (and exercising any Swiss resolution powers in connection
therewith), and instituting liquidation proceedings, all of which may have a material adverse effect on
shareholders and creditors or may prevent UBS Group AG, UBS AG or UBS Switzerland AG from paying dividends
or making payments on debt obligations.


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UBS would have limited ability to challenge any such protective measures, and creditors and shareholders would
have no right under Swiss law or in Swiss courts to reject them, seek their suspension, or challenge their
imposition, including measures that require or result in the deferment of payments.
If restructuring proceedings are opened with respect to UBS Group AG, UBS AG or UBS Switzerland AG, the
resolution powers that FINMA may exercise include the power to: (i) transfer all or some of the assets, debt and
other liabilities, and contracts of the entity subject to proceedings to another entity; (ii) stay for a maximum of
two business days (a) the termination of, or the exercise of rights to terminate, netting rights, (b) rights to enforce
or dispose of certain types of collateral or (c) rights to transfer claims, liabilities or certain collateral, under
contracts to which the entity subject to proceedings is a party; and/or (iii) partially or fully write down the equity
capital and, if such equity capital is fully written down, convert into equity or write down the capital and other
debt instruments of the entity subject to proceedings. Shareholders and creditors would have no right to reject,
or to seek the suspension of, any restructuring plan pursuant to which such resolution powers are exercised.
They would have only limited rights to challenge any decision to exercise resolution powers or to have that
decision reviewed by a judicial or administrative process or otherwise.
Upon full or partial write-down of the equity and debt of the entity subject to restructuring proceedings, the
relevant shareholders and creditors would receive no payment in respect of the equity and debt that is written
down, the write-down would be permanent, and the investors would not, at such time or at any time thereafter,
receive any shares or other participation rights, or be entitled to any write-up or any other compensation in the
event of a potential recovery of the debtor. If FINMA orders the conversion of debt of the entity subject to
restructuring proceedings into equity, the securities received by the investors may be worth significantly less than
the original debt and may have a significantly different risk profile, and such conversion would also dilute the
ownership of existing shareholders. In addition, creditors receiving equity would be effectively subordinated to
all creditors of the restructured entity in the event of a subsequent winding up, liquidation or dissolution of the
restructured entity, which would increase the risk that investors would lose all or some of their investment.
FINMA has significant discretion in the exercise of its powers in connection with restructuring proceedings.
Furthermore, certain categories of debt obligations, such as certain types of deposits, are subject to preferential
treatment. As a result, holders of obligations of an entity subject to a Swiss restructuring proceeding may have
their obligations written down or converted into equity even though obligations ranking on par with or junior to
such obligations are not written down or converted.
If restructuring or liquidation proceedings are instituted against UBS AG, holders of securities may suffer a
substantial or total loss on the securities.
Liquidity and funding management are critical to UBS AG's ongoing performance
The viability of UBS AG's business depends on the availability of funding sources, and its success depends on its
ability to obtain funding at times, in amounts, for tenors and at rates that enable it to efficiently support its asset
base in all market conditions. UBS AG's funding sources have generally been stable, but could change in the
future because of, among other things, general market disruptions or widening credit spreads, which could also
influence the cost of funding. A substantial part of UBS AG's liquidity and funding requirements are met using
short-term unsecured funding sources, including retail and wholesale deposits and the regular issuance of money
market securities. A change in the availability of short-term funding could occur quickly.
Moreover, more stringent capital and liquidity and funding requirements will likely lead to increased competition
for both secured funding and deposits as a stable source of funding, and to higher funding costs. The addition
of loss-absorbing debt as a component of capital requirements, the regulatory requirements to maintain
minimum TLAC at UBS AG's holding company and at subsidiaries, as wel as the power of resolution authorities
to bail in TLAC and other debt obligations, and uncertainty as to how such powers will be exercised, will increase
UBS AG's cost of funding and could potentially increase the total amount of funding required, in the absence of
other changes in its business.
Reductions in UBS AG's credit ratings may adversely affect the market value of the securities and other obligations
and increase its funding costs, in particular with regard to funding from wholesale unsecured sources, and could
affect the availability of certain kinds of funding. In addition, as experienced in connection with Moody's
downgrade of UBS AG's long-term debt rating in June 2012, rating downgrades can require UBS AG to post
additional collateral or make additional cash payments under trading agreements. UBS AG's credit ratings,
together with its capital strength and reputation, also contribute to maintaining client and counterparty
confidence, and it is possible that rating changes could influence the performance of some of its businesses.


7
The requirement to maintain a liquidity coverage ratio of high-quality liquid assets to estimated stressed short-
term net cash outflows, and other similar liquidity and funding requirements, oblige UBS AG to maintain high
levels of overall liquidity, limit its ability to optimise interest income and expense, make certain lines of business
less attractive and reduce its overall ability to generate profits. The liquidity coverage ratio and net stable funding
ratio requirements are intended to ensure that UBS AG is not overly reliant on short-term funding and that it has
sufficient long-term funding for illiquid assets. The relevant calculations make assumptions about the relative
likelihood and amount of outflows of funding and available sources of additional funding in market-wide and
firm-specific stress situations. There can be no assurance that in an actual stress situation UBS AG's funding
outflows would not exceed the assumed amounts.
1.2. Market and macroeconomic risks
In this risk category, the four risk factors presented first are the most material in the assessment of the Issuer as
of the date of this Registration Document.
UBS AG's results of operations and financial condition have been, and will likely continue to be,
adversely affected by the COVID-19 pandemic.
The spread of the coronavirus disease (COVID-19) pandemic and the governmental measures taken to contain
the pandemic have significantly adversely affected, and will likely continue to adversely affect, global economic
conditions, resulting in meaningful contraction in the global economy, substantial volatility in the financial
markets, increased unemployment, increased credit and counterparty risk, and operational challenges such as
the temporary closures of businesses, sheltering-in-place directives and increased remote work protocols.
Governments and central banks around the world have reacted to the economic crisis caused by the pandemic
by implementing stimulus and liquidity programs and cutting interest rates, though it is unclear whether these
or future actions will be successful in countering the economic disruption. If the pandemic is prolonged or the
actions of governments and central banks are unsuccessful, the adverse impact on the global economy will
deepen, and UBS AG`s results of operations and financial condition in future quarters will be adversely affected.
The outlook for the global economy has deteriorated markedly since the end of 2019 as a result of the COVID-
19 outbreak. COVID-19 and related lockdown measures have significantly impacted major economies across the
world. Uncertainties are still at a high level, making predictions difficult and displaying several potential triggers
for further negative developments. The COVID-19 pandemic has affected all of UBS AG's businesses, and these
effects could be greater in the future if adverse conditions persist. These effects have included declines in asset
prices, significantly increased volatility, lower or negative interest rates, widening of credit spreads and credit
deterioration. These effects have resulted in decreases in the valuation of loans and commitments, an increase
in the allowance for credit losses and lower valuations of certain classes of trading assets. While these effects
were offset by high levels of client trading activity in the first and second quarters of 2020, this level of activity
may not persist in future quarters.
Should these global market conditions be prolonged or worsen, or the pandemic lead to additional market
disruptions, UBS AG may experience reduced client activity and demand for its products and services, increased
utilization of lending commitments, more client defaults, higher credit and valuation losses in UBS AG's loan
portfolios, loan commitments and other assets, and impairments of other financial assets. In addition, a sharp
decline in interest rates would decrease net interest margins. A decline in invested assets would also reduce
recurring fee income in the Global Wealth Management and Asset Management businesses. These factors and
other consequences of the COVID-19 pandemic may negatively affect UBS AG's financial condition, including
possible constraints on capital and liquidity, as well as a higher cost of capital, and possible changes or
downgrades to our credit ratings.
Although UBS AG has moved a substantial portion of its workforce to work-from-home solutions, including
client-facing and trading staff, if significant portions of its workforce, including key personnel, are unable to work
effectively because of illness, government actions, or other restrictions in connection with the pandemic, the
adverse effects of the pandemic on its businesses could be exacerbated. In addition, with staff working from
outside the offices, UBS AG faces new challenges and operational risks, including maintenance of supervisory
and surveillance controls, as well as increased fraud and data security risks. While UBS AG has taken measures
to manage these risks, such measures have never been tested on the scale or duration that UBS AG is currently
experiencing, and there is risk that these measures will not be effective in the current unprecedented operating
environment.


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The extent to which the pandemic, and the related economic distress, affect UBS AG's businesses, results of
operations and financial condition, as well as its regulatory capital and liquidity ratios, will depend on future
developments that are highly uncertain and cannot be predicted, including the scope and duration of the
pandemic and any recovery period, future actions taken by governmental authorities, central banks and other
third parties in response to the pandemic, and the effects on UBS AG's customers, counterparties, employees
and third-party service providers.
Performance in the financial services industry is affected by market conditions and the macroeconomic
climate
UBS AG's businesses are materially affected by market and macroeconomic conditions. Adverse changes in
interest rates, credit spreads, securities prices, market volatility and liquidity, foreign exchange rates, commodity
prices, and other market fluctuations, as well as changes in investor sentiment, can affect UBS AG's earnings and
ultimately its financial and capital positions.
A market downturn and weak macroeconomic conditions can be precipitated by a number of factors, including
geopolitical events, global trade disruption, changes in monetary or fiscal policy, changes in trade policies, natu-
ral disasters, pandemics, civil unrest, acts of violence, war or terrorism. Such developments can have unpredicta-
ble and destabilising effects and, because financial markets are global and highly interconnected, even local and
regional events can have widespread effects well beyond the countries in which they occur. Any of these devel-
opments may adversely affect UBS AG's business or financial results.
If individual countries impose restrictions on cross-border payments, trade, or other exchange or capital controls,
or change their currency (for example, if one or more countries should leave the eurozone), UBS AG could suffer
losses from enforced default by counterparties, be unable to access its own assets, or be unable to effectively
manage its risks.
Should the market experience significant volatility, a decrease in business and client activity and market volumes
could result, which would adversely affect UBS AG's ability to generate transaction fees, commissions and
margins, particularly in Global Wealth Management and the Investment Bank, as UBS AG experienced in the
fourth quarter of 2018. A market downturn would likely reduce the volume and valuation of assets that UBS AG
manages on behalf of clients, which would reduce recurring fee income that is charged based on invested assets
in Global Wealth Management and Asset Management and performance-based fees in Asset Management. Such
a downturn could also cause a decline in the value of assets that UBS AG owns and account for as investments
or trading positions. In addition, reduced market liquidity or volatility may limit trading opportunities and may
therefore reduce transaction-based income and may also impede UBS AG's ability to manage risks.
UBS AG could be materially affected if a crisis develops, regionally or globally, as a result of disruptions in markets
due to macroeconomic or political developments, or as a result of the failure of a major market partici-pant. Over
time, UBS AG's strategic plans have become more heavily dependent on its ability to generate growth and
revenue in emerging markets, including China, causing it to be more exposed to the risks associated with such
markets.
Global Wealth Management derives revenues from all the principal regions, but has a greater concentration in
Asia than many peers and a substantial presence in the US, unlike many European peers. The Investment Bank's
business is more heavily weighted to Europe and Asia than its peers, while its derivatives business is more heavily
weighted to structured products for wealth management clients, in particular with European and Asian
underlyings. UBS AG's performance may therefore be more affected by political, economic and market
developments in these regions and businesses, including the effects of the Covid-19 outbreak, than some other
financial service providers.
UBS AG's credit risk exposure to clients, trading counterparties and other financial institutions would
increase under adverse economic conditions
Credit risk is an integral part of many of UBS AG's activities, including lending, underwriting and derivatives
activities. Adverse economic or market conditions may lead to impairments and defaults on these credit
exposures. Losses may be exacerbated by declines in the value of collateral securing loans and other exposures.
In UBS AG's prime brokerage, securities finance and Lombard lending businesses, UBS AG extends substantial
amounts of credit against securities collateral, the value or liquidity of which may decline rapidly. UBS AG's Swiss
mortgage and corporate lending portfolios are a large part of its overall lending. UBS AG is therefore exposed to
the risk of adverse economic developments in Switzerland, including the strength of the Swiss franc and its effect


9
on Swiss exports, prevailing negative interest rates by the Swiss National Bank, economic conditions within the
eurozone or the EU, and the evolution of agreements between Switzerland and the EU or European Economic
Area, which represent Switzerland's largest export market. In addition, under the IFRS 9 expected credit loss
("ECL") regime, credit loss expenses may increase rapidly at the onset of an economic downturn as a result of
higher levels of credit impairments (stage 3), as well as higher ECL from stages 1 and 2, only gradually diminishing
once the economic outlook improves. Substantial increases in ECL could exceed expected loss for regulatory
capital purposes and adversely affect UBS AG's equity and common equity tier 1 ("CET1") capital and regulatory
capital ratios.
The aforementioned developments have in the past affected, and going forward could materially affect,
UBS AG's overall financial performance and the financial performance of UBS AG's individual businesses.
Low and negative interest rates in Switzerland and elsewhere could continue to negatively affect UBS
AG's net interest income
The continuing low or negative interest rate environment may further erode interest margins and adversely affect
the net interest income generated by the Personal & Corporate Banking and Global Wealth Management
businesses. The Swiss National Bank permits Swiss banks to make deposits up to a threshold at zero interest and
has recently increased this threshold. Any reduction in or limitation on the use of this exemption from the
otherwise applicable negative interest rates could exacerbate the effect of negative interest rates in Switzerland
on UBS AG's business.
Low and negative interest rates may also affect customer behaviour and hence UBS AG's overall balance sheet
structure. Mitigating actions that UBS AG has taken, or may take in the future, such as the introduction of selec-
tive deposit fees or minimum lending rates, have resulted and may further result in the loss of customer deposits
(a key source of funding for UBS AG), net new money outflows and a declining market share in UBS AG's Swiss
lending business.
UBS's shareholders' equity and capital are also affected by changes in interest rates. In particular, the calculation
of UBS's Swiss pension plan's net defined benefit assets and liabilities is sensitive to the applied discount rate and
to fluctuations in the value of pension plan assets. Any further reduction in interest rates may lower the discount
rates and result in pension plan deficits as a result of the long duration of corresponding liabilities. This could
lead to a corresponding reduction in UBS AG's "CET1" capital.
UBS AG's plans to ensure uninterrupted business dealings as the UK withdraws from the EU may not
be effective
Plans that UBS has taken to ensure uninterrupted business dealings as the UK withdraws from the EU may not
be effective if the UK and the EU do not reach a deal by the end of the transition period, scheduled to end on
31 December 2020, resulting in disruptions across the financial sector.
To prepare UBS AG's business for the UK withdrawal from the EU, UBS completed a merger of UBS Limited, its
UK-based subsidiary, into UBS Europe SE, its Germany-headquartered European subsidiary, which is under the
direct supervision of the European Central Bank. All clients and counterparties of UBS Limited who would not be
able to be serviced by UBS AG, London Branch following the exit of the UK from the EU have been transferred
to UBS Europe SE.
Regulators in both the UK and Europe have taken measures to minimize business disruption in the financial sector
in the event of a no-deal scenario, including the UK implementation of a temporary permissions regime so that
firms currently using an EU passport for business into the UK can continue operating within the scope of their
existing permissions, as well as the recognition by EU authorities of three UK-authorised central counter-parties.
However, the pace of the negotiations has been affected by the COVID-19 pandemic. The UK and EU had both
committed to complete the various equivalence assessments under existing financial services legislation by June
2020, but no further information from the EU and UK authorities about the outcome of those assessments has
been released. It is unclear whether and when the EU and the UK will grant equivalence to each other.
Should the UK exit the transition period without at least the majority of equivalence determinations in place, it
could cause significant disruption across the financial industry and, under extreme conditions, contribute to a
weakening of the global economy. UBS Europe SE's exposures to UK central counterparties ("CCPs") would need
to be migrated to an EU CCP before the end of the transition period. In addition, a number of market structure


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