UBS CEO on Capital Rules, Credit Suisse Deal, and Global Trade

UBS Q2 Performance and Integration Progress

• 🚀 Overall profitability saw a 25% year-on-year increase, with wealth management businesses in all regions achieving double-digit growth on a PBT basis.
• 💡 The integration of Credit Suisse is progressing well, with nine billion in cost savings already achieved out of a target of 13 billion.
• 🔑 A significant milestone was the migration of 400,000 clients in Switzerland, with a second wave planned for the third quarter.
• 📈 The non-core and legacy assets unit is making good progress, with costs being reduced.

Headquarters and Relationship with Switzerland

• 🏦 UBS is focused on serving clients and delivering the integration, with a base case of successfully operating out of Switzerland as a global bank.
• 💬 The relationship between UBS and Switzerland is described as strong and solid, serving over 2.5 million clients and 200,000 SMEs.
• ⚠️ Speculation about a new headquarters is not being entertained, with decisions to be based on facts and real numbers, not theory or fears.

Capital Requirements and Strategic Outlook

• 🚫 Shrinking is not an option for UBS; the bank benefits from diversification, which is a strength for both the bank and Switzerland.
• 🤝 The acquisition of Credit Suisse is viewed as a "deal of the century" for Switzerland, resolving major issues and stabilizing the system.
• 📈 From an industrial logic standpoint, the combination creates a stronger global bank, though the jury is still out from a shareholder perspective due to capital uncertainties.
• 💰 UBS maintains a clear dividend policy aiming for growth and is executing share buyback plans, with new regulations not expected before 2027.

Global Trade and Regulatory Landscape

• 🌍 The prospect of cooling global trade tensions and increased predictability should support results as investor activity revives.
• ⚠️ Tariffs are a concern, with a potential 15% average increase bringing inflation and impacting exporters, leading to uncertainty for clients.
• ⚖️ The bank hopes for a proper cost-benefit analysis before decisions on capital requirements are made, emphasizing the need for predictability and stability in agreements.
• 🌐 While Basel III is being implemented in Switzerland, the bank hopes for alignment in the US, noting that not all post-financial crisis regulations were correct.
• 📊 The theory of people moving away from the dollar is seen as more of a tactical issue than a massive asset allocation shift.