WEBVTT - UBS Chief Executive Officer Sergio Ermotti Talks Earnings, Capital Requirements, Trade

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Overarching all of this

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<v Speaker 1>is the trade narrative that we're watching so carefully. It

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<v Speaker 1>is reaching into every single one of these stories and

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<v Speaker 1>having an impact upon it. UBS is absolutely no exception

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<v Speaker 1>this morning, the numbers dropping a little bit earlier on

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<v Speaker 1>second quarter pre tax profit that has exceeded expectations. Net

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<v Speaker 1>income also beating up two point four at two point

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<v Speaker 1>four billion dollars versus two point two billion the estimate there.

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<v Speaker 1>There's a bunch of technical factors in there relating to

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<v Speaker 1>the wind down of Credit SUITEE, also some provisioning there.

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<v Speaker 1>What is interesting though, is looking forward, what we're hearing

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<v Speaker 1>is that actually, with some certainty, clients are starting to transact.

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<v Speaker 2>A little bit more.

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<v Speaker 1>And it was those earnings that Francine Laquar kicked off

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<v Speaker 1>in her conversation with Sergio and Mozzi a few minutes ago.

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<v Speaker 3>If I look at the overall profitability, particularly when looking

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<v Speaker 3>at the core underlying profits being up twenty five percent

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<v Speaker 3>or a year with wealth management businesses in in every

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<v Speaker 3>region growing on a PbD basis double digit, very strong,

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<v Speaker 3>and uh I see good inflows in a in our

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<v Speaker 3>alternative business in as management reaching three hundred billions.

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<v Speaker 2>Of of assets in markets.

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<v Speaker 3>We delivered the second best quarter h on in in

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<v Speaker 3>in the on the records.

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<v Speaker 2>So I think that UH.

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<v Speaker 3>Across the board in Switzerland we continue to be a

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<v Speaker 3>strong partner to our clients, you know, with forty billions

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<v Speaker 3>of UH credits or new credits.

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<v Speaker 2>So across the board, making good progress on the integration.

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<v Speaker 2>Big milestones was achieved.

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<v Speaker 3>Four hundred thousand clients were migrated in Switzerland in a

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<v Speaker 3>smooth way, and we are now working on UH delivering

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<v Speaker 3>the second wave in the in the in the in

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<v Speaker 3>the third quarter UH and in non core and legacy

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<v Speaker 3>assets we are making good program and taking down cost

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<v Speaker 3>and so I can very please so Eve.

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<v Speaker 4>Even your head of expectations in terms of integration.

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<v Speaker 2>No, we are online. We are on track.

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<v Speaker 3>I mean the integration. I think the next We already

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<v Speaker 3>achieved nine billions of cost savings out of the thirteen UH,

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<v Speaker 3>so we we believe back between now and your end,

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<v Speaker 3>we're gonna achieve another billion or so, and then three

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<v Speaker 3>billions are gonna come in two thousand and twenty six

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<v Speaker 3>as we basically shut down all the legacy systems and

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<v Speaker 3>and we.

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<v Speaker 2>Also complete all the logistical migrations.

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<v Speaker 4>The relationship between UBS and Switzerland l looks from the

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<v Speaker 4>outside to be a rock botty do you need Switzerland?

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<v Speaker 3>I think that we have a very strong and solid

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<v Speaker 3>relationship with our clients and you know, the broader, the broaders.

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<v Speaker 1>With.

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<v Speaker 3>Business community and and and and and client space. We

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<v Speaker 3>we serve more than two and a half billion clients,

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<v Speaker 3>probably even higher two hundred thousand SMEs, So we we

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<v Speaker 3>have a very solid and imbedded a relationship with the

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<v Speaker 3>communities where we live and work in Switzerland.

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<v Speaker 2>So I think that's you.

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<v Speaker 3>Know, I will not really extrapolate some kind of issues

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<v Speaker 3>to the broader Swiss Switzerland. The vast majority of people

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<v Speaker 3>recognize our value and we recognize the value Switzerland brings to.

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<v Speaker 4>Us when you look at the market views. Of course,

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<v Speaker 4>it's a big week for trade. I think we also

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<v Speaker 4>have GDP a little bit later in the U wants.

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<v Speaker 4>But how do you see that going forward?

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<v Speaker 3>Well, I mean the good use is then now we

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<v Speaker 3>have probably a higher degree of predictability on what.

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<v Speaker 2>The outcome of the start discussion will be.

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<v Speaker 3>If we land at around fifteen percent on average is

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<v Speaker 3>a base case scenario which in any case is something

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<v Speaker 3>that needs to be digested.

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<v Speaker 2>This is six times higher than what we had at

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<v Speaker 2>the beginning of the year. This brings some kind of inflation.

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<v Speaker 3>If you think from an exporter standpoint of view, if

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<v Speaker 3>you're a Swiss or you'll be an exporter, you are

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<v Speaker 3>basically as seeing your clients in the US have to

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<v Speaker 3>pay fifteen percent more because of tarists, plus another ten

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<v Speaker 3>to fifteen percent more because of effanks, and this is

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<v Speaker 3>a quite big change. So there remains to be seen

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<v Speaker 3>what's happening in Europe in terms of economic effect, but

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<v Speaker 3>also what is the consequences for inflation in the US.

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<v Speaker 2>And this will then.

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<v Speaker 3>Translate into potentially consequences for the monetary policies of central banks.

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<v Speaker 4>Our clients saying, look, they're also worried that this is

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<v Speaker 4>not it for terror, so that they can always move back,

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<v Speaker 4>So actually the uncertainty is remain.

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<v Speaker 2>That's a fair point.

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<v Speaker 3>I think that's what investors and clients, corporate and institutional

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<v Speaker 3>investor private investors.

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<v Speaker 2>Want to see is stability.

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<v Speaker 3>I mean, first of all, we need to reach agreements,

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<v Speaker 3>and then they need to see that there is a

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<v Speaker 3>degree of predictability and stability in disagreements. Uh, there is

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<v Speaker 3>a degree of news fatigue, fatigue in the in the

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<v Speaker 3>in the market, so people are wanting to be able

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<v Speaker 3>to act with

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<v Speaker 1>Certainly a little bit of fatigue, certainly feeling that U

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<v Speaker 1>B S is CEO, of course, Sergio Motti in conversation

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<v Speaker 1>with Boomberg's Francis Laquas over in Zurich,