Sergio Ermotti, chief executive officer of UBS Group
Stefan Wermuth Bloomberg | Getty Images
UBS CEO Sergio Ermotti on Wednesday said people with concerns about the size of the bank’s balance sheet were being “indoctrinated” by academics and should “do their homework”.
UBS completed its takeover of Credit Suisse in June 2023 after an emergency rescue deal was brokered by Swiss authorities to prevent the collapse of the then 167-year-old institution and protect the Swiss economy.
Ermotti was brought back to the helm of UBS to oversee the complex integration of Credit Suisse’s business – a mission so far rated a resounding success by the market. The bank’s share price recovered from below 17 Swiss francs ($19.69) per share after the deal to more than 25 Swiss francs on Wednesday morning.
However, the combined balance sheet of the new entity is estimated to be roughly twice the entire GDP of Switzerland, raising concerns about the concentration of risk in the Swiss economy.
Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, on Wednesday, Ermotti said he understands why some parts of the Swiss population still have reservations because they are “almost daily indoctrinated by many academics” and focus. solely on the size of the bank’s balance against the national 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 actually a very low-risk, very focused business model. The risk we have is in Swiss mortgages. , in pawn loans, in things that are very low risk,” he said.
Ermotti claimed that the “new UBS” incorporating its fallen rival to create a globally 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, pharmaceuticals, in innovation – and having a strong bank that can compete, not only in Europe, but globally, is part of our economy”, he. said
He also argued that the focus on the risk to the Swiss taxpayer does not take into account the scale of the bank’s own tax contributions, urging the public to “look at the risks but also the benefits”.
“In that sense, our role is to help the people who are not convinced, who 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 who have other opinions. but I do expect them to do their homework,” he added.
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