UBS Needs US Presence to Be Successful, Ermotti Tells CNBC

UBS Group AG has to have a presence in the US to prosper, Chief Executive Officer Sergio Ermotti said, in a sign that he’s unwilling to consider cutbacks to meet the capital requirements that Switzerland is set to impose.

Some “40% of the millionaires in the world live in the US, so as a truly global manager of wealth we need to be in the US to be successful,” Ermotti said in a CNBC interview on Tuesday. “And so we are further investing in capabilities to stay competitive.”

UBS is seeking to dissuade Switzerland from imposing hefty new capital requirements on its largest bank, but a recent vote in the parliament’s upper house has decreased its chances of swaying lawmakers. At least two of the lender’s shareholders, Artisan Partners and Cevian Capital AB, have urged it to leave Switzerland as a radical way to get out from the country’s banking regulation.

Read More: UBS Faces Swiss Exit or Stay-and-Pay as Capital Defeat Nears

Swiss Finance Minister Karin Keller-Sutter has downplayed a suggestion that UBS could leave to avoid stricter capital rules, saying such a move would be more expensive than staying. Ermotti reiterated his desire to stay in Switzerland, adding that the bank’s focus is to try to do the best out of what they currently have.

“We believe being based in Switzerland is good for the Swiss economy, for our clients and our shareholders,” he said in the interview.

One other option for UBS to deal with the future regulation would be to cut back its international footprint. That would help because the new rules are designed to force the bank to hold more capital at home for its foreign subsidiaries.

However, the Swiss bank has made international growth a priority and it recently obtained a broader US banking license to underpin the effort. Ermotti and Chairman Colm Kelleher had previously floated the idea of acquisitions in the country.

UBS is in the final stages of completing the acquisition of its formal rival Credit Suisse and has already realized about 90% of the synergies from the deal, Ermotti said.

“We are finally going to be finished by the end of 2026, and then we move forward,” he said.