Sergio Ermotti, Chief Executive Officer of UBS Group AG, said that in this quarter there is a good dynamic of the return of funds that customers withdrew from Credit Suisse before the takeover.
The head of the financial institution, during a conversation with media representatives, said that it would take several quarters to return a significant part of the withdrawn money. He also noted that it is unlikely to be possible to get back all about $200 billion that customers have withdrawn. At the same time, Sergio Ermotti said that the main goal of the bank is to return as much money as possible to the accounts.
This year, the value of UBS shares has increased by more than a third. The positive dynamic is recorded against the background of active investor support for the bank’s plan to stabilize Credit Suisse and integrate its profitable business.
Sergio Ermotti says that there is currently a positive influx of customers around the world. According to him, currently, the mood of investors is more constructive. He also said that it is gratifying to see that customers are responding to the bank’s actions.
Sergio Ermotti stated the commitment of the financial institution to its activities in China, noting that the geopolitical situation has changed amid tensions in relations between Beijing and Washington. The bank has limited direct access to the real estate sector in this Asian country. The financial institution characterizes its activities in China as a movement towards the goal of helping people manage their own wealth. According to Sergio Ermotti, the assessment of options for actions in relation to the Credit Suisse securities company, which became part of the UBS ownership structure following the merger, is currently ongoing.
The main global business of UBS focused on capital management, recorded an influx of customers in the second quarter of this year, which in monetary terms amounts to $16 billion. The flows of funds to the Credit Suisse asset management unit in June showed a positive dynamic.
UBS acquired the mentioned bank this year. Credit Suisse before it was on the verge of bankruptcy. UBS said that the integration of the acquired bank’s business, which was previously its competitor, will last for several years.
The entry of Credit Suisse into the ownership structure of the new owner has increased the number of staff of the financial institution headed by Sergio Ermotti by 45 thousand people to just under 120 thousand people.
The head of UBS says that he was able to take advantage of the natural reduction of staff in order to change the size of the business. He also said that the financial institution is making efforts to reduce the social costs associated with the loss of jobs.
UBS plans to cut about 3,000 employees in its home markets. The bank will also cut hundreds of asset management jobs in Asia. The media reported that in recent months, the financial institution has abandoned some duplicate functions and will continue to do so.
Sergio Ermotti said that since the beginning of this year, about 8 thousand Credit Suisse employees have quit around the world. This is partly the result of cost-cutting that the bank acquired by UBS initiated before the merger. After the conclusion of the transaction between financial institutions, the implementation of this strategy accelerated.
Last month, UBS announced its intention to close two-thirds of the Credit Suisse investment bank, including almost all trading operations. This decision is part of the actions of a financial institution to exit a business that does not match its strategy. Assets related to this corporate sector will be transferred to a non-core unit for winding down, which had approximately $55 billion in assets at the end of June. During the last quarter, about $8 billion of positions were closed.
Sergio Ermotti said that the perimeter around the non-core asset is being finalized. He also announced the continuation of work on winding down this part of the balance sheet.
As we have reported earlier, UBS to Pay Over $1 Billion to Settle Fraud Claims.