Sergio Ermotti, president of UBS Group
Stefan Wermuth|Bloomberg|Getty Images
UBS CEO Sergio Ermotti on Wednesday stated individuals with issues about the size of the bank’s balance sheet are getting “indoctrinated” by academics and need to “do their homework.”
UBS finished its takeover of Credit Suisse in June 2023 after an emergency situation rescue offer was brokered by Swiss authorities to avoid the then 167- year-old organization’s collapse and secure the Swiss economy.
Ermotti was reminded the helm of UBS to supervise the complex combination of Credit Suisse’s organization– an objective so far considered a definite success by the market. The bank’s share cost has actually recuperated from listed below 17 Swiss francs ($1969) per share in the consequences of the offer to over 25 Swiss francs since Wednesday early morning.
However, the brand-new entity’s combined balance sheet is approximated to be around two times the size of the whole GDP of Switzerland, raising issues about the concentration of danger in the Swiss economy.
Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, on Wednesday, Ermotti stated he comprehended why some parts of the Swiss population still have appointments, as they are being “indoctrinated almost daily by a lot of academics” and focusing exclusively on the size of the bank’s balance sheet versus the nationwide GDP.
“If you look at risk-weighted assets as a percentage of GDP or as a percentage of our balance sheet, you will discover that the new UBS is de facto very low risk, very focused business model. The risk we have is in Swiss mortgages, in Lombard loans, in stuff that is very low risk,” he stated.
Ermotti competed that the “new UBS” including its fallen competitor to develop a worldwide competitive, low-risk bank is a “reflection of Switzerland.”
“Switzerland is a small country that punches well above its weight in many sectors — in food, in pharma, in innovation — and having a strong bank that can compete, not only in Europe, but globally, is part of our economy,” he stated.
He likewise argued that the concentrate on the danger to the Swiss taxpayer stops working to consider the scale of the bank’s own tax contributions, advising the general public to “look at the risks but also the benefits.”
“In that sense, our role is to help the people who are not convinced, that want to listen to arguments, to inform them so that they come to an opinion that is informed, hopefully the right one. I respect people having other opinions, but I do expect them to do their homework,” he included.
