UBS : 31 December 2023 – UBS Europe SE Financial Statements

Independent auditor's report

To UBS Europe SE

Report on the audit of the annual Õnancial statements and of the management report

Opinions

We have audited the annual Õnancial statements of UBS Europe SE, Frankfurt am Main, which comprise the balance sheet as at 31 December 2023, and the income statement for the Õscal year from 1 January 2023 to 31 December 2023, and notes to the Õnancial statements, including the recognition and measurement policies presented therein. In addition, we have audited the management report of UBS Europe SE for the Õscal year from 1 January 2023 to 31 December 2023. In accordance with the German legal requirements, we have not audited the content of the statement on corporate governance pursuant to Sec. 289f (4) HGB ["Handelsgesetzbuch": German Commercial Code] included in the section "Non-Õnancial key performance indicators" of the management report (disclosures on the quota for women on executive boards). We have not audited the content of the company information that is provided outside of the annual Õnancial report and is cross-referenced in the "Non-Õnancial key performance indicators" and/or "Non-Õnancial statement" sections of the management report.

In our opinion, on the basis of the knowledge obtained in the audit,

• the accompanying annual Õnancial statements comply, in all material respects, with the requirements of German commercial law applicable to institutions and give a true and fair view of the assets, liabilities and Õnancial position of the Institution as at 31 December 2023 and of its Õnancial performance for the Õscal year from 1 January 2023 to 31 December 2023 in compliance with German legally required accounting principles, and

• the accompanying management report as a whole provides an appropriate view of the Institution's position. In all material respects, this management report is consistent with the annual Õnancial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. We do not express an opinion on the statement on corporate governance referred to above.

Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the annual Õnancial statements and of the management report.

Basis for the opinions

We conducted our audit of the annual Õnancial statements and of the management report in accordance with Sec. 317 HGB and the EU Audit Regulation (No 537/2014, referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the "Auditor's responsibilities for the audit of the annual Õnancial statements and of the management report" section of our auditor's report. We are independent of the Institution in accordance with the requirements of European law and German commercial and professional law, and we have fulÕlled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit Regulation, we declare that we have not provided non- audit services prohibited under Art. 5 (1) of the EU Audit Regulation.We believe that the audit evidence we have obtained is sufÕcient and appropriate to provide a basis for our opinions on the annual Õnancial statements and on the management report.

Key audit matters in the audit of the annual Õnancial statements

Key audit matters are those matters that, in our professional judgment, were of most signiÕcance in our audit of the annual Õnancial statements for the Õscal year from 1 January 2023 to 31 December 2023. These matters were addressed in the context of our audit of the annual Õnancial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.

Below, we describe what we consider to be the key audit matter:

Commission income from the Global Wealth Management division

Reasons why the matter was determined to be a key audit matter

Providing wealth management services for high net worth individuals in Europe is the core business of UBS Europe SE. Wealth management services include custody account and asset management, fund brokerage and the securities brokerage business and are carried on by the Global Wealth Management division.

In view of the non-standardized contractual agreements with clients, the provision of wealth management services by various European branches of the Institution and the materiality of the resulting commission income for Õnancial performance, this matter was a key audit matter.

Auditor's response

We addressed the correct recognition of commission income from Wealth Management by applying a controls-based audit approach at the main branches in Germany, Luxembourg, Italy and France. To this end, we performed walkthroughs of the relevant business processes, assessed the adequacy of the controls relevant to the audit and implemented in the Wealth Management division and tested the effectiveness of those controls. This primarily relates to the Bank's processes and controls for recording and modifying the contractually agreed rates and the amount of assets under management as the base value used for the calculation. To test the relevant IT controls, we consulted our internal experts who have particular expertise in IT audits.

Using a representative sample, we assessed whether the contractually agreed terms were correctly reÖected in the position-keeping systems by comparing them with the corresponding asset management contracts.

We also checked the mathematical accuracy of the commission income for each transaction type in a representative sample.

In addition, we performed substantive analytical audit procedures on the total amount and development of commission income from the Global Wealth Management division in the Õscal year from 1 January 2023 to 31 December 2023.

Our procedures did not lead to any reservations relating to the recognition of commission income from the Global Wealth Management division.

Reference to related disclosures

The income is reported in the income statement under commission income and explained in the notes under "Management and brokerage services." Further information can be found in the sections of the management report on the Global Wealth Management division.

Other information

The Supervisory Board is responsible for the Supervisory Board's annual report. In all other respects, the executive directors are responsible for the other information. The other information comprises the statement on corporate governance pursuant to Sec. 289f (4) HGB referred to above (disclosures on the quota for women on executive boards). The other information also comprises additional parts of the annual Õnancial report of which we obtained a copy prior to issuing this auditor's report, in particular the "Supervisory Board's report for 2023," but not the annual Õnancial statements, not the management report disclosures whose content is audited and not our auditor's report thereon.

Our opinions on the annual Õnancial statements and on the management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information

• is materially inconsistent with the annual Õnancial statements, with the management report or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.

Responsibilities of the executive directors and the Supervisory Board for the annual Õnancial statements and the management report

The executive directors are responsible for the preparation of the annual Õnancial statements that comply, in all material respects, with the requirements of German commercial law applicable to institutions, and that the annual Õnancial statements give a true and fair view of the assets, liabilities, Õnancial position and Õnancial performance of the Institution in compliance with German legally required accounting principles. In addition, the executive directors are responsible for such internal control as they, in accordance with German legally required accounting principles, have determined necessary to enable the preparation of annual Õnancial statements that are free from material misstatement, whether due to fraud (i.e., fraudulent Õnancial reporting and misappropriation of assets) or error.

In preparing the annual Õnancial statements, the executive directors are responsible for assessing the Institution's ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for Õnancial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conÖict therewith.

Furthermore, the executive directors are responsible for the preparation of the management report that, as a whole, provides an appropriate view of the Institution's position and is, in all material respects, consistent with the annual Õnancial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a management report that is in accordance with the applicable German legal requirements, and to be able to provide sufÕcient appropriate evidence for the assertions in the management report.

The Supervisory Board is responsible for overseeing the Institution's Õnancial reporting process for the preparation of the annual Õnancial statements and of the management report.

Auditor's responsibilities for the audit of the annual Õnancial statements and of the management report

Our objectives are to obtain reasonable assurance about whether the annual Õnancial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the Institution's position and, in all material respects, is consistent with the annual Õnancial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor's report that includes our opinions on the annual Õnancial statements and on the management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inÖuence the economic decisions of users taken on the basis of these annual Õnancial statements and this management report.

We exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the annual Õnancial statements and of the management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufÕcient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit of the annual Õnancial statements and of arrangements and measures (systems) relevant to the audit of the management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems of the Institution.
• Evaluate the appropriateness of accounting policies used by the executive directors and the reasonableness of estimates made by the executive directors and related disclosures.
• Conclude on the appropriateness of the executive directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signiÕcant doubt on the Institution's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report to the related disclosures in the annual Õnancial statements and in the management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Institution to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the annual Õnancial statements, including the disclosures, and whether the annual Õnancial statements present the underlying transactions and events in a manner that the annual Õnancial statements give a true and fair view of the assets, liabilities, Õnancial position and Õnancial performance of the Institution in compliance with German legally required accounting principles.
• Evaluate the consistency of the management report with the annual Õnancial statements, its conformity with [German] law, and the view of the Institution's position it provides.

• Perform audit procedures on the prospective information presented by the executive directors in the management report. On the basis of sufÕcient appropriate audit evidence we evaluate, in particular, the signiÕcant assumptions used by the executive directors as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiÕcant audit Õndings, including any signiÕcant deÕciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, the related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most signiÕcance in the audit of the annual Õnancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

Other legal and regulatory requirements

Further information pursuant to Art. 10 of the EU Audit Regulation

We were elected as auditor by the Annual General Meeting on 1 June 2023. We were engaged by the Supervisory Board on 1 June 2023. We have been the auditor of UBS Europe SE without interruption since Õscal year 2000.