管理層發言
Ladies and gentlemen, good morning. Welcome to the UBS Second Quarter 2026 Results. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sarah Mackey, UBS Investor Relations. Please go ahead, madam.
Good morning, and welcome, everyone. Before we start, I would like to draw your attention to our cautionary statement slide at the back of today's results presentation. Please also refer to the risk factors included in our annual report together with additional disclosures in our SEC filings. Throughout our remarks, we will refer to underlying results in U.S. dollars and make year-over-year comparisons unless stated otherwise. On Slide 2, you can see our agenda for today. It's now my pleasure to hand over to Sergio Ermotti, Group CEO.
Thank you, Sarah, and good morning, everyone. Almost 3 years ago, we presented our first set of consolidated results. From the beginning, I made it clear that the acquisition of Credit Suisse was not a gift that we received, but rather a price that we would have all had to fight to win. As expected, the journey was not a straight line; it required a lot of hard work from my colleagues at UBS and painful decisions. Now these efforts are paying off and the extraordinary patience and support of our shareholders is starting to be rewarded. In the first half of the year, we achieved a return on CET1 capital of around 17%. While the year is not over, we are close to achieving the same level of profitability UBS had prior to the acquisition, underscoring our efforts over the last 3 years. Just as importantly, we laid the foundation to drive sustainable value creation and long-term growth while providing enhanced capabilities to our clients and even better opportunities for our people. The second quarter provided further evidence of the power of our globally diversified franchise and our potential. Markets remained remarkably resilient and client sentiment was constructive, supported by growing confidence in the long-term outlook for global growth and continued investment in AI and emerging technologies. Against this backdrop, our integrated One Bank model remains a key driver of growth as we deliver the full breadth of our capabilities across the firm to clients, deepening relationships and reinforcing our competitive position. This was reflected in another quarter of robust inflows into our Global Wealth and Asset Management platforms, which drove group invested assets to a record of $7.3 trillion. The value of collaboration is most evident in the performance of our APAC and Americas regions this quarter, where we achieved several revenue records across our franchises. Profit before tax doubled in APAC and grew by 85% in the Americas. In Switzerland, we granted or renewed around CHF 40 billion of loans to businesses and households, and we saw broad-based growth across all our businesses booked in Switzerland and for the first full quarter in which we were operating on UBS platforms. The Investment Bank delivered another quarter of exceptional returns while maintaining risk and capital discipline, a reflection of our strengthened competitive position and the enhanced scale of our platform. We are also close to substantially completing the integration by the end of the year as planned. With all clients migrated and the wind down of Non-core and Legacy nearing completion, more than 90% of legacy business applications are no longer in use. This enabled us to accelerate decommissioning and further simplify our operations. As we realize cost synergies, we continue to strategically invest to drive long-term growth by expanding our technological capabilities, including AI, digital assets and infrastructure. We are empowering our colleagues with the tools and skills needed to accelerate adoption and deliver greater value for clients and help improve productivity in the coming years. Our performance to date has resulted in a healthy capital generation. This has further fortified our balance sheet for all seasons and allows us to continue to deploy resources towards profitable growth opportunities, to support clients and deliver on our capital return ambitions. With our latest share repurchase program just finished, we are continuing with another program under which we intend to buy back $3 billion of shares at the latest by the end of the second quarter 2027. We plan to buy back at least $1 billion over the next 3 months. The amount and pace will remain subject to our short-term financial performance and outlook, maintaining a CET1 capital ratio of around 14% and further visibility on the deliberations by the Swiss Parliament on the capitalization of foreign subsidiaries. As we enter the third quarter, market conditions remain broadly constructive, supported by healthy client engagement, the continued broadening of market leadership and historically elevated equity dispersion. At the same time, ongoing geopolitical developments and volatile energy prices lead to high levels of uncertainty around inflation and the interest rate outlook. This could contribute to changes in macroeconomic conditions, periods of elevated volatility and more measured investor sentiment. In closing, we entered the second half of the year with considerable momentum, and we are well positioned to outperform our 2026 exit rate return target and achieve our exit rate cost/income ratio target. But we know that conditions can change quickly and important work remains. As a result, we remain firmly focused on what we can control: staying close to clients, completing the integration, executing on our growth plans and managing risk with discipline, all while remaining a trusted partner in the communities where we live and work. With that, let me hand over to Todd.
Thank you, Sergio, and good morning, everyone. In the second quarter, we delivered reported net profit of $2.8 billion and earnings per share of $0.87. On an underlying basis, our pretax profit was $3.9 billion, up 45% year-on-year, and our return on CET1 capital was 16.4%. Revenues increased by 16% to $13.3 billion and were up 14% across our core franchises. Operating expenses were 7% higher on stronger revenue performance and were down 7% when excluding variable compensation, litigation and currency effects. Overall, we drove 8 percentage points of positive operating leverage, resulting in a cost/income ratio of 70%. Moving to Slide 6. Our strong second quarter results underscore our earnings power with broad-based growth across each of our core franchises, led by Global Wealth Management and the Investment Bank. This balanced performance reflects continued client momentum, the breadth of our capabilities and the durable benefits of the integration. On a reported basis, our pretax profit of $3.6 billion included $352 million of revenue adjustments and $645 million of integration expenses. Consistent with our full year guidance, we expect integration-related expenses in the second half to be around $750 million, split roughly evenly between the third and fourth quarters as we complete the remaining work and close out the integration program by year-end. The effective tax rate was 22%, slightly below our full year guidance of 23%. Turning to our cost update on Slide 7. During the second quarter, we delivered further gross cost reductions of $1.1 billion, bringing cumulative savings since the end of 2022 to $12.6 billion. With more than 90% of the cost synergies expected from the acquisition now realized, we remain firmly on track to achieve our $13.5 billion ambition by the end of this year. The total headcount at quarter end was 112,000, 4% lower sequentially and approximately 28% below our 2022 baseline. Over the same period, we've also reduced the group's operating expenses by 28% when excluding litigation, variable compensation and currency effects. Building on strong execution in the first quarter, we further progressed our cost actions in 2Q, accelerating the realization of synergies we had expected later this year. Together with strong revenue performance, this has created additional capacity, which we are selectively directing towards investments in growth, technology and operational resilience to strengthen our positioning for the future. At the same time, we remain firmly focused on delivering our underlying cost/income ratio target as of the end of the year. Turning to Slide 8. As of the end of June, our balance sheet for all seasons consisted of $1.7 trillion in total assets. Within that, we saw 1% sequential growth in our loan book, while deposit balances were broadly stable. Credit quality within our loan portfolio remains strong with credit impaired exposures of 1% and a 7 basis point cost of risk. Group credit loss expense totaled $121 million, largely driven by Stage 3 positions in Personal & Corporate Banking and the Investment Bank. Our tangible book value per share decreased sequentially by 2% to $26.89, primarily as shareholder distributions of $3.4 billion related to the 2025 dividend and share repurchases in the quarter more than offset total comprehensive income. On funding, having completed our AT1 plan by the end of March, we took advantage of favorable market conditions in the second quarter to prefund part of our future AT1 needs. Looking ahead, we'll remain opportunistic as market conditions allow. Overall, we continue to operate with a highly fortified and resilient balance sheet with total loss absorbing capacity of $194 billion, a net stable funding ratio of 115% and an LCR of 177%. Turning to capital on Slide 9. Our CET1 capital ratio at the end of June was 14.4%, and our CET1 leverage ratio was 4.4%. Our common equity Tier 1 capital in the quarter decreased by $0.8 billion, mainly as earnings accretion was more than offset by accruals for future capital returns, including the entirety of the new $3 billion share repurchase program that Sergio highlighted earlier. The buyback accrual reduced our CET1 capital ratio in the quarter by around 60 basis points with a 20 basis point impact on our CET1 leverage ratio. RWA increased by $4 billion, while LRD was lower sequentially by a similar amount, reflecting disciplined resource deployment alongside elevated client activity. Turning to UBS AG. The parent bank's stand-alone CET1 capital ratio on a fully applied basis increased sequentially to 14.4%, mainly reflecting dividend payments from its subsidiaries and strong operating performance. This was partially offset by a $1.8 billion dividend accrual in the quarter. Turning to our business divisions and starting on Slide 10 with Global Wealth Management. GWM delivered a pretax profit of $2 billion, up 38% year-over-year with positive operating jaws of 7 points and double-digit growth across all regions and revenue lines. Our performance this quarter once again demonstrates the strength and breadth of our wealth franchise. The combination of leading capabilities, differentiated CIO insight and a truly global footprint positions us to capture an increasing share of the secular growth in global wealth. Net new assets totaled $36 billion, equivalent to 3% annualized growth and contributing to a seasonal sequential increase in invested assets of 6%. We continue to see strong demand for our CIO-led solutions, leading to $13 billion of net new fee-generating assets and record mandate penetration, clear evidence of the value clients place on our trusted expert advice. Demand for discretionary mandates remained particularly strong, including for our flagship My Way solution with invested assets now exceeding $40 billion, up 75% year-on-year. Client sentiment remained constructive during the quarter, supporting continued releveraging across regions. Net new loans were $7 billion, mainly driven by Lombard, especially in the Americas and APAC. Net new deposits were $2 billion as inflows into current and savings accounts more than offset outflows in fixed term deposits. From a regional perspective, Asia Pacific delivered another quarter of standout performance with pretax profit up 48%, a 45% pretax margin and double-digit growth across all revenue lines. Asset gathering also remained strong with annualized growth of 5% in net new assets and 8% in net new fee-generating assets. Mandate penetration increased by 5 percentage points year-on-year to a record level, underscoring how the APAC wealth team is broadening client relationships and adding another dimension to its growth through more recurring and diversified revenue streams. In the Americas, disciplined execution of our strategic priorities continues to drive stronger momentum and profitability. Pretax profits grew 47% with a pretax margin of 16%, supported by record quarterly revenues. Net new loans were $3 billion, reflecting continued traction from our enhanced banking capabilities. Strong same-store performance drove positive net new assets of $1 billion despite around $10 billion of seasonal tax-related outflows. EMEA delivered another strong quarter with pretax profit increasing 28% and the pretax margin reaching 38%, alongside $12 billion of net new assets. Continued and sustained demand for CIO-led solutions drove 9% annualized growth in net new fee-generating assets, helping lift mandate penetration by 5 percentage points year-on-year and setting a new benchmark for the division. Our Swiss unit grew its pretax profit by 25% and attracted $14 billion in net new assets, reflecting growing client momentum and operating efficiency following the successful completion of the Swiss booking center migration last quarter. Turning to divisional revenues, which increased by 14%. Recurring net fee income grew by 11% to $3.7 billion, supported by positive market performance and around $70 billion of net new fee-generating assets over the past 12 months. Transaction-based income rose 23% to $1.5 billion, marking the 12th consecutive quarter of double-digit year-on-year growth. APAC and the Americas each grew transaction fees by around 30%, fueled by strong client activity in structured products and cash equities. This reflects the power of our integrated client-centric approach, bringing together GWM and the IB to deliver differentiated solutions at scale. Net interest income of $1.8 billion rose by 12% year-over-year and 1% sequentially, with the quarter-on-quarter rise largely driven by higher loan volumes. For 3Q, we expect GWM NII to increase modestly, supported by further lending expansion and higher deposit margins. We now expect full year 2026 GWM net interest income to grow by around 10% versus 2025 with strong loan growth, higher U.S. dollar rates than previously assumed and an improved deposit mix more than offsetting margin compression in lower rate currencies. Operating expenses in GWM rose by 6%. When excluding variable compensation, litigation and currency effects, costs declined by 1%. Turning to Personal & Corporate Banking on Slide 11. P&C delivered a pretax profit of CHF 676 million, up 21%, with positive operating leverage of 7 percentage points. With the final stages of client account migration successfully completed, our Swiss business entered the second quarter fully focused on growth. Strong momentum in both attracting new clients and deepening existing relationships drove positive net new clients, balance sheet expansion across both loans and deposits and 10% annualized net new investment product growth for the first half. These higher volumes and client activity levels contributed to a 3% increase in total revenues. Net interest income increased by 1% year-on-year and 2% sequentially, driven by higher loan volumes. We expect continuing lending momentum to support flat to slightly higher P&C NII in the third quarter. Noninterest revenue increased by 4%, led by Personal Banking, where custody and mandate fees benefited from positive markets and strong net new investment product flows. In Corporate & Institutional Clients, lower activity in structured and syndicated finance largely reflected deal timing slipping into later periods, while trade and export finance remained strong, particularly among clients in the energy sector. Other revenues this quarter included valuation gains on investments. Credit loss expense was CHF 61 million, driven by Stage 3 positions. Given ongoing macroeconomic uncertainty, we continue to expect credit losses in the second half to average around CHF 75 million per quarter. Reflecting the first half outcome, we now expect P&C's full year CLE to come in below our previous estimate of around CHF 300 million. Operating expenses declined by 4%, driven by continued synergy realization and disciplined cost management. Turning to Asset Management on Slide 12. Pretax profit grew by 9% to $237 million with assets under management surpassing $2.2 trillion. Revenues declined by 2%, mainly reflecting the absence of fee contributions from O'Connor following its sale at the end of last year. Excluding business exit effects, revenues increased by 5% as fees from higher average invested assets were partly offset by margin pressure and an adverse year-on-year swing in net valuation effects. Net new money was $6 billion, driven by SMAs, ETFs and Unified Global Alternatives. UGA reached $366 billion of invested assets and attracted $10 billion of new commitments across GWM and AM in the quarter. Building on this momentum, we recently announced a strategic partnership with MSCI to enhance transparency and support growth by combining our investment expertise and client insights with MSCI's data and analytics capabilities. Operating expenses declined 6%, reflecting ongoing cost discipline and the lower direct expense base following the O'Connor disposal. We expect the sale to have broadly similar impacts on third and fourth quarter revenue and expense comparisons. On to Slide 13. The Investment Bank delivered excellent results, generating record 2Q revenues, a pretax profit of $1.2 billion, more than double the prior year quarter and a pretax return on equity of over 23%. Notably, we achieved this performance without materially expanding our balance sheet. While revenues increased 31% to $3.7 billion, RWA and LRD rose only modestly, underscoring the strength of our client franchise and our ability to capture significantly higher activity with disciplined use of financial resources. Global Banking revenues increased by 33% to $693 million. Capital Markets was a standout, up 55% with notable strength in LCM, where revenues more than doubled year-on-year alongside strong performances in both ECM and DCM. Advisory revenues were 5% lower, primarily reflecting an M&A market increasingly skewed toward a small number of very large transactions where participation is often influenced by broader client financing relationships. Looking ahead, our pipeline remains healthy with strong client engagement and activity building across regions, supported by close collaboration with GWM in originating advisory opportunities. Beyond the very largest deals, we continue to see good momentum across the broader advisory market, particularly in the mid- to large cap segment, where our competitive position continues to strengthen. Global Markets delivered a record second quarter with revenues increasing by 31% to just over $3 billion. Equities led the performance with revenues up 53% on strong client activity, elevated cash equity volumes and exceptional momentum in Asia Pacific, where markets achieved a record quarter. FRC revenues were 21% lower, reflecting a less favorable environment for our business mix than a year ago and disciplined resource allocation as we selectively shifted balance sheet capacity to capitalize on stronger client momentum in equities. Operating expenses increased by 11%, driven by higher personnel expenses. On Slide 14, Non-core and Legacy generated a pretax loss of $52 million, while we continue to drive down costs on an accelerated basis. Excluding litigation, expenses in the quarter declined 72% year-on-year and 30% sequentially, resulting in cost reduction versus the 2022 baseline of 88%. Reflecting the pace and scale of cost savings already achieved, we now expect the 2026 exit rate for NCL operating expenses, excluding litigation, to be around $400 million. Risk-weighted assets in NCL were broadly stable sequentially, reflecting a concentration of smaller, more bespoke positions in the residual portfolio. To close, the return on CET1 capital and the cost/income ratio we delivered in the first half of 2026 are important proof points of the earnings power and scalability of our franchise as well as our continued cost discipline. They also demonstrate how strong client engagement, disciplined execution and capital efficiency are translating into durable operating leverage as we enter the final phases of the integration and position the firm for future growth. With both metrics already ahead or within striking distance of our 2026 exit rate targets, we are increasingly confident in our ability to meet and potentially exceed our financial ambitions. With that, let's open for questions.
分析師問答
The first question comes from the line of Jeremy Sigee from BNP Paribas.
I wanted to ask a couple of questions about the businesses, please. Firstly, on the Investment Bank, how do you balance the growth opportunity versus the balance sheet constraints that you impose on that business? You're showing that you can get revenue growth without expanding the balance sheet. Can you talk about how you achieve that? How do you put through significantly more volume with a constrained or unchanged balance sheet in the IB? And then the second question was just on U.S. Wealth Management. I know it's a familiar theme, but you saw significant further adviser exits in the quarter. I just wondered if you could comment on those exits and more broadly where you are in the stabilization of the U.S. Wealth Management franchise.
Jeremy, thanks for those questions. In terms of the IB, we operate within our limits. We think that's important to the value proposition that we offer, which is to run an Investment Bank that supports Global Wealth Management and our Corporate & Institutional Clients. Resource allocation to the IB and within the IB is central to how we focus. The business focused particularly on intermediation within equities, which drove a lot of the outperformance we had in equities. The balance sheet within equities was used more sparingly to support prime brokerage financing balances. We also allocate within the IB as we see fit and saw more opportunities in the quarter to drive markets outperformance, including in intermediation, and moved some capital allocation away from FRC into equities. On your second question, we're comfortable with the steps we're taking to drive full year net new assets in wealth in the Americas. We recognize there's a lag effect from previously announced financial adviser movement that will continue to show up in flows for a few quarters. We are actively recruiting and investing in teams aligned with our profitability ambitions. Adviser rotation remains elevated across the industry given record valuations, but we continue to expect these dynamics to normalize in our book over the course of 2026.
The next question comes from the line of Giulia Aurora Miotto from Morgan Stanley.
My first one is on the buyback, the $3 billion. How should we read the fact that this goes until June '27 rather than until year-end? I would guess if we get some sort of compromise in parliament, maybe it can be completed by year-end, if not, by June. Any comment on how we should think about the buyback would be great. And then secondly, on the parent capital, the plus 50 basis points quarter-on-quarter. Any comment on that capital build, please?
Giulia, thanks for the questions. The way the share buyback language was constructed was to do a couple of things. One, we wanted to commit to at least $1 billion that we're going to buy over the next 3 months. On the other hand, the program we announced today runs until the second quarter of 2027 at the latest. Timing will depend on our performance supported by markets, maintaining a capital ratio of around 14%, and the deliberations in the Swiss Parliament around the capital treatment of foreign subsidiaries. As these developments offer more visibility, we can update our expectations. In terms of the parent bank's sequential build in capital, this reflects a few things. First, the strong operating performance of the group, which manifests in the parent bank, and strong operating performance in its subsidiaries, allowing for upstreaming to the parent bank through ordinary dividends, for example from the Americas and the Swiss subsidiary. At the same time, we are managing the level of dividend accrual that we're upstreaming to the group. In the first half, the parent bank generated around $5 billion of profit, and we accrued about $3.5 billion of dividends. That reflects prudent management of the Tier 1 leverage ratio at the parent bank on a consolidated basis and contributes to the sequential growth in the parent bank stand-alone capital ratio.
The next question comes from the line of Kian Abouhossein from JPMorgan.
First question is related to ODI rules in China, which kicked in July 1. I'm trying to understand if it had an impact on your business and how you think about ODI impact generally on your Wealth business in Hong Kong, in particular? And then second question is related to Hong Kong again, where we see material growth in the affluent and also in the high net worth segment where you are maybe not present, especially clearly not in the affluent. Do you have any ambitions to expand in that area, considering the structural growth we're seeing in affluent, high net worth Hong Kong?
Thanks, Kian. On ODI, it is still early. Based on what we're seeing and our conversations, we don't view the evolving framework as a material constraint on our opportunity, nor is it having any immediate impact on flows. We see those developments primarily as an evolution in transparency and reporting requirements, consolidating existing requirements with more focus on enforcement, specifically on offshore online brokers targeting Mainland investors. We do not see that as a catalyst for change affecting client demand for international diversification, and it is not appearing in our numbers. Given our cross-border framework and strong compliance mindset with disciplined source of wealth standards, we believe we are well positioned to navigate the evolving environment. Regarding Asia flows and affluent ambition, we're pleased with the position of our Asia franchise. In addition to first half net new assets and fee-generating asset annualized growth of 7% and 10%, respectively, we continue to deliver strong profitability and client asset growth while broadening regional contributions to client asset and profitability growth. We're broadening client relationships and adding recurring and diversified revenue streams, setting a record for mandate penetration in the quarter. We are investing selectively in areas such as high net worth adviser capacity, particularly through digital and platform scalability, to broaden growth opportunities. At the moment, the mass affluent is less of a focus, but as we build out digital capabilities, we see potential to move into the upper part of the affluent segment.
That's interesting. May I just ask you one more: where are we on mandate penetration in GWM? We haven't had an update for a while.
Overall, we are now at an all-time high across sectors. APAC in particular has come a long way; mandate penetration has roughly doubled over the last two or three years. The business is broadening the types of solutions it brings to clients, including mandates, and broadening geographic diversity within APAC. This supports a bullish view on growth prospects.
The next question comes from the line of Stefan Stalmann from Autonomous Research.
I wanted to start with your very strong performance in equities trading. It's not quite as good as the U.S. banks, but it's better than your European peers that have reported so far, and you've probably done quite a bit of benchmarking work around this. Maybe you can add a bit of color on where you think you've done better or worse than others, perhaps where business mix or geographic differences play a role in explaining the relative performance versus peers. And the second question is about GWM, where you mentioned an $8 billion negative impact on invested assets from exiting certain markets or exiting certain services. Could you explain what that relates to?
On the $8 billion, that was an exit in one part of our business, a relatively small part, and it impacted AUM but did not impact flows in the quarter. On equity trading, our geographical diversification across the Investment Bank is a differentiator. We are strong across the globe and were able to leverage the APAC opportunity this past quarter, which was evident in our results. Our ability to stay close to clients, the relationships we have developed, and our ability to generate revenue growth without materially extending the balance sheet have been differentiators for equities trading. Prime brokerage and the financing revenues we have generated have also differentiated us from certain peers, even while being disciplined in resource allocation.
I just wanted to follow up on the $8 billion. Was that an exit from a particular geography, or was it more of a client group? Which geography would I find that in?
We'll come back on the details on that one, Stefan.
The next question comes from the line of Anke Reingen from RBC.
First is on your return on core Tier 1 capital. It seems you're looking to exceed your target for 2026. While I understand you might not want to update 2028 at this stage, based on structural progress made in 2026, are you seeing potential upside to your 2028 target? Or is this distinguishing cyclical versus structural progress on your ROE? And secondly, on Asia, given some weakness in equity markets in the region, are you seeing this as a material headwind to your equities performance in the Investment Bank as well as in Wealth Management?
Anke, we are pleased with our performance and the momentum across the business. We continue to have confidence in our ability to deliver against our ambitions with the first half performance we've delivered. We remain well positioned to achieve our targets with scope to outperform. Regarding anything for 2028, we'll update as part of our fourth quarter strategic update early next year. On Asia, the Investment Bank and Asia Wealth both performed strongly and Asia was a standout regional performance. We see continuing momentum in APAC and are encouraged about the outlook. One other differentiator across equities is prime brokerage and the financing revenues we've generated, which have been differentiating factors relative to some peers.
The next question comes from the line of Andrew Coombs from Citi.
Perhaps one follow-up and then a fresh question on net new money. On the equities result, you talked about having a diversified geographical mix, but you do over-index in Asia versus a number of your peers. Clearly, that's had a very strong second quarter because of the index rebalance given what's happened in Korea and, to a lesser extent, Taiwan. We're now seeing that reverse. Beyond that, how sustainable do you think the equities revenue strength is in Asia? And then more broadly on net new money, very healthy print in Europe and Asia, and the U.S. too. Can you elaborate on how much of that you think is cyclical related to the current IPO environment versus how much is structural because you've now integrated Credit Suisse and some adviser attrition is easing?
Andrew, our global diversification allows us to take advantage of strong equity markets and client activity in Asia and elsewhere. The very strong performance in volumes we saw in Asia in the second quarter and the first quarter is unlikely to continue at that level, but we are well positioned to take advantage of strong markets wherever they occur. Regarding whether wealth management trends are cyclical or structural, while supportive markets contributed, an increasing share of performance reflects non-market factors. This gives me confidence about the durability and structural strength of our profitable growth trajectory in GWM. Proof points include record mandate penetration, sustained transaction-based revenue outperformance, lending momentum and deeper client engagement through the integrated One UBS capabilities. We are pushing more into structural drivers so performance becomes more durable.
The next question comes from the line of Benjamin Goy from Deutsche Bank.
Two questions. First, Personal & Corporate Banking: the cost base is stable but down year-on-year. Given the progress on integration, should we expect a more meaningful step down in the cost base in Q3 going forward? And then on Asia, can you comment on the visibility of the pipeline of inflows, also thinking about lockups coming after the IPOs in recent months and how that could support your Wealth Management franchise?
Ben, on IPO lockups, our GWM performance in growth and asset acquisition is diversified across sources, so while IPOs help, we are not highly dependent on them. We are not pricing in a downturn in net new asset growth as a result of lockups. On costs, we continue to see meaningful integration-related benefits coming through Wealth and P&C in the second half, including from technology decommissioning, organization simplification and other integration actions. Strong execution in the first half meant some benefits were realized earlier than expected. We are selectively investing a portion of the capacity we created into technology and other initiatives, including select adviser hiring that support growth, productivity and attractive long-term returns. Our clear guardrail remains our exit 2026 underlying cost/income ratio target, and we remain focused on delivering it. As we finish the integration, we should still expect to see further benefits on our OpEx line.
The next question comes from the line of Amit Goel from Mediobanca.
I have follow-up questions on the U.S. Wealth business. Previously you said you expect the net recruiting outflow impacts to materially taper in the second half of this year. Is that still the case? In Q2, there were still adviser outflows, so there could be impact into Q3. Also, net new assets were positive but net new fee-generating assets were negative. In prior years, NNFGA held up better. What drove that dynamic this quarter?
Amit, on Wealth headcount in the U.S., reported headcount was 2% down year-on-year and 1% down quarter-on-quarter. Reported headcount reflects a lag in timing when advisers come on or off payroll, so there is a timing lag. We expect the impact to taper as we work through the issue and continue to expect Wealth in the Americas to be a positive contributor to net new assets for the full year 2026. Regarding net new assets versus net new fee-generating assets, I would not overread one quarter versus another; there is nothing I would call out as a specific driver explaining the delta between the two metrics this quarter. Over time, both metrics are meeting our expectations, which is the more important point.
The last question comes from the line of Joseph Dickerson from Jefferies.
Congratulations on a very robust set of results. You've guided GWM NII to grow by around 10% versus 2025, which is quite ahead of market expectations. Could you break that down a little in terms of rates versus volume? Is this mainly because you've seen better lending volumes and deposit margins are robust? Also, on Asset Management, this business is not a large part of the group and has been slightly underwhelming the past few quarters. Is this a business you intend to keep strategically, and how does it fit with the rest of the group?
Joe, on GWM the guidance of around 10% year-on-year is supported by higher rates, lending growth and a favorable deposit mix. Moderately higher U.S. dollar rates create a structural tailwind from asset yields on loans and our replicating portfolio as those yields increase and are only partially offset by higher deposit costs that are tempered by our deposit mix. That drives the revised year-on-year outlook.
On Asset Management, from a strategic standpoint it fits well with our asset gathering center organization. We have reshaped and restructured the business, disposing of activities that were dilutive to our cost/income ratio and focusing the business with progress toward strong relative performance versus peers. We see potential to grow in alternatives — we are a significant LP in alternatives and saw good inflows during the quarter — and we are developing capabilities in passive ETFs. Geographically, we are expanding capabilities and joint ventures with external partners. I am very happy with the momentum, which justifies continued investment and positions Asset Management as a strategic element of our asset gathering story. It is an integral part of our equity story.
We have no further questions. We'd like to close the call and thank everyone for dialing in and asking their questions today. We look forward to updating you with our third quarter results and wish everyone a good summer holiday. Thank you.
Ladies and gentlemen, the webcast and Q&A session for analysts and investors is over. You may now disconnect your lines. We will now take a short break and continue with the media Q&A session at 10:45 a.m. CEST. Thank you.