UBS CEO: Capital reduction dependent on new capital requirements
Published: Tuesday, May 7th 2024, 10:20
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UBS CEO Sergio Ermotti has once again spoken out against stricter capital requirements for the big bank. The current and planned regulations would mean additional requirements totaling around 20 billion US dollars, he said on Tuesday in a conference call with analysts on the occasion of the figures for the first quarter of 2024.
This is already reflected in the financial targets. However, he could not comment on a possible further capital requirement today. It would be too early, as there is no clarity at all. He could not say today what impact this could have on UBS, said Ermotti. The bank was not involved in the discussion process on the Federal Council's report on banking stability (TBTF).
However, UBS will make a contribution and hopes for a "good result". At the same time, the bank is concentrating on what it can "control": working well operationally and offering clients a good service and thus creating added value for shareholders.
However, Ermotti also said that future decisions regarding additional capital requirements could have an impact on UBS's return of capital to its shareholders. Otherwise, however, the plans in this regard were confirmed for the time being: The bank wants to start again with share buybacks and acquire shares worth up to 1 billion dollars in 2024. The plan is to start after the merger of the legal entities UBS AG and Credit Suisse AG at the end of May, as the UBS CEO said.
In 2026, the buy-backs should then exceed the original levels from before the CS takeover. The dividend per share is still expected to increase by a mid-teens percentage in 2024. The bank has already started to make corresponding provisions, said Ermotti.
Discussions about stricter capital requirements had recently caused uncertainty on the market. This was triggered by the Federal Council's report on banking stability around a month ago. According to Finance Minister Karin Keller-Sutter, UBS may have to build up additional capital in the region of CHF 15 to 25 billion. However, no decisions are likely to be made before the conclusion of the PUK on the demise of CS, which is expected by the end of the year.
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