Credit scenario update drives UBS loan-loss reserves higher
Gloomier US outlook contributes to $272m of Q2 provisions
UBS downgraded its economic outlook in Q2 as the coronavirus pandemic worsened. The change contributed to a $272 million provision charge to cover souring loans.
Expected credit loss (ECL) provisions taken for IFRS 9 stage one and two loans – those that are yet to default – hit $202 million for the three months to end-June, up from $89 million in Q1. Of this amount, $127 million was taken to reflect the bleaker macroeconomic assumptions included in its forward-looking credit models. Another $75
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