Moody's on June 18 took various ratings actions on UBS AG and certain branches, concluding a review for upgrade initiated in April.
The agency upgraded UBS AG's long-term deposit ratings to Aa2 from Aa3; its long-term issuer and senior unsecured ratings to Aa3 from A1; long-term counterparty risk assessment to Aa2(cr) from Aa3(cr); long-term counterparty risk ratings to Aa2 from Aa3; and baseline and adjusted baseline credit assessments to "a3" from "baa1." The outlooks on the long-term deposit, issuer and senior unsecured ratings are stable.
The bank's P-1 short-term deposit and counterparty risk ratings and P-1(cr) short-term counterparty risk assessment were affirmed.
The upgrades reflect Moody's view that UBS' large global wealth and asset management activities, as well as its Swiss universal banking business, will sufficiently mitigate the risks and greater earnings volatility inherent in the group's remaining capital markets activities going forward. Moody's said the stable businesses safeguard UBS' profitability and capital position even under more adverse market conditions.
Moody's also upgraded to Aa2(cr) from Aa3(cr) the long-term counterparty risk assessments of UBS AG Australia Branch, UBS AG Jersey Branch, UBS AG London Branch, UBS AG New York Branch, UBS AG Stamford and UBS Ltd., as well as their long-term counterparty risk ratings to Aa2 from Aa3. Also upgraded were UBS Ltd.'s long-term issuer rating to Aa3 from A1, with a stable outlook, and the senior unsecured debt ratings of the branches in Australia, Jersey, London and Stamford to Aa3 from A1, with stable outlooks.
UBS Group Funding (Switzerland) AG's backed senior unsecured debt rating was also upgraded to A3 from Baa1, with a stable outlook.
The agency also affirmed the branches' and UBS Ltd.'s P-1(cr) short-term counterparty risk assessments and their P-1 short-term counterparty risk ratings, as well as UBS Ltd.'s P-1 short-term issuer rating.
UBS AG is the main operating subsidiary of UBS Group AG.