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Fitch Ratings has revised the outlook of UBS Group AG UBS, UBS AG's and UBS Switzerland AG to Positive from Stable. UBS's long-term Issuer Default Rating (IDR) has been affirmed at 'A,' while UBS AG's and UBS Switzerland AG's have been affirmed at 'A+.’
This upgrade reflects Fitch’s expectation that UBS’s well-advanced integration of Credit Suisse ("CS") will continue to reduce execution risks while improving profitability.
Rationale Behind UBS’s Rating Upgrade
Execution Risk Declining: Fitch expects UBS’s execution risk to decline steadily as Credit Suisse integration progresses, with minimal residual risk expected after client migration and system decommissioning. The integration, expected to be completed by end-2026, has progressed efficiently, reinforcing UBS’s clear strategic direction, operational resilience, and financial strength. Positive Outlook also considers the expectation of a significant and durable improvement in profitability from 2026.
UBS has effectively controlled integration risks over the past two years, preventing operational disruptions and preserving its prudent risk culture. The wind-down of non-core and legacy assets inherited from CS is ahead of schedule, further demonstrating the effectiveness of the transition.
Stronger UBS Post CS Integration: The Positive Outlook indicates Fitch's confidence that the integration of Credit Suisse will enhance UBS’s business model by increasing scale and diversifying revenue. This supports UBS’s well-executed strategy and its strong leadership in global wealth management. Additionally, UBS benefits from a top-tier Swiss retail and corporate bank, as well as an investment bank with a moderate size and risk profile, focused on complementing its wealth management operations.
Profitability Set for Strong Growth: Fitch expects UBS’s profitability to recover to pre-acquisition levels within the next few years, once integration costs recede in 2026. Specifically, UBS’s operating profit/risk-weighted assets ratio, which was 0.2% in 2023, rebounded to 1.4% in 2024 and 1.5% in 2025. Fitch projects further growth to 2.5% in 2026 and 3% in 2027, maintaining close to this level thereafter.
Liquidity Strength and Resilient Capital Position: UBS’s capital position remains strong, with Fitch expecting a buffer over its medium-term CET1 ratio guidance of 14% until integration is completed. UBS maintains one of the highest Basel leverage ratios among European banks, reinforcing its financial stability. Additionally, its liquidity coverage ratio (LCR) stood at 181% in the first quarter of 2025, highlighting a stable funding profile.
Risk Management and Stabilized Funding: Fitch expects UBS to continue managing integration risk effectively, ensuring stable operations and mitigating disruptions. UBS has steadily improved its loans-to-deposits ratio to 83% in the first quarter of 2025, approaching pre-acquisition levels. The bank’s effective control over integration risk has prevented operational disruptions, ensuring a smooth transition of CS’s Swiss clients onto UBS systems. Fitch acknowledges UBS’s prudent risk culture, reflected in its low impaired loans ratio of close to 1%, which is significantly better than that of its European peers.