UBS CEO Ermotti says 90% CET1 capital proposal is no real compromise
UBS•Third-quarter trading trends and advisory fees
Speaking at a Bank of America event, Ermotti also said he saw broadly positive momentum for UBS's third quarter results, with transactions in wealth management up year-on-year, though not by as much as last year.
For the investment bank, he cautioned that fee pools in the advisory business are going to be down, with UBS expected to be in line with market trends.
Ermotti rejects 90% CET1 proposal as a real compromise
ZURICH, Sept 22 (Reuters) - UBS UBSG.S CEO Sergio Ermotti said on Tuesday a proposal to make the bank back its foreign units with 90% Common Equity Tier 1 capital instead of 100% CET1 is not really a compromise, urging the country to pursue a more moderate course.
"The current proposal from the Federal Council at 100% and the 90% is de facto the same," Ermotti said, characterising both options as a distortion of UBS's competitive position. "We don't think that this is an acceptable outcome."
The upper house of parliament is on Wednesday due to vote on new capital rules drawn up for UBS following the 2023 collapse of Credit Suisse.
Ermotti threw his weight behind a compromise proposal agreed last month by a parliamentary committee that would allow UBS to back foreign subsidiaries with 50% CET1 capital and 50% Additional Tier 1 capital, which is cheaper to hold.
"We believe it's a balanced way, which is costly for the bank, but still a balanced way to address the topic," he said. "It's the way to go."
