1 00:00:02,320 --> 00:00:07,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. So Jo, thank you 2 00:00:07,720 --> 00:00:09,479 Speaker 1: very much for your time. A beat, of course when 3 00:00:09,520 --> 00:00:12,240 Speaker 1: it comes to profits in terms of revenue, and the 4 00:00:12,280 --> 00:00:15,600 Speaker 1: Global Markets team performing very well, the best quarter on 5 00:00:15,760 --> 00:00:18,160 Speaker 1: record for them. If we were looking for soft spots, 6 00:00:18,200 --> 00:00:20,119 Speaker 1: maybe in terms of the estimates, a bit of a 7 00:00:20,120 --> 00:00:22,360 Speaker 1: miss when it comes to asset management and wealth, but 8 00:00:22,400 --> 00:00:25,040 Speaker 1: the flows are still there. Earnings per share is a 9 00:00:25,040 --> 00:00:27,800 Speaker 1: beat as well. To those trends, particularly when it comes 10 00:00:27,800 --> 00:00:30,560 Speaker 1: to the volatility that you've seen and the upside gains 11 00:00:30,640 --> 00:00:32,440 Speaker 1: for the Global Markets team in the first court. Do 12 00:00:32,440 --> 00:00:34,800 Speaker 1: you expect those trends to continue in the quarters ahead. 13 00:00:35,360 --> 00:00:37,319 Speaker 2: Well, first of all, I have to say that I'm 14 00:00:37,360 --> 00:00:41,040 Speaker 2: particularly happy to see our results because they underline the 15 00:00:41,120 --> 00:00:45,440 Speaker 2: real value of our global leriasify to franchise, and also 16 00:00:45,479 --> 00:00:47,839 Speaker 2: when you look at Wealth Management, as to the management 17 00:00:47,880 --> 00:00:52,240 Speaker 2: and the investment banking board are delivered double digit. 18 00:00:52,000 --> 00:00:53,400 Speaker 3: Pre tax profit expansion. 19 00:00:53,640 --> 00:00:58,080 Speaker 2: Our core businesses at combined fifteen percent expansion. So I 20 00:00:58,120 --> 00:01:01,360 Speaker 2: think it's of course, so we saw a little bit 21 00:01:01,360 --> 00:01:05,759 Speaker 2: of seasonality, positive seasonality, particularly in the first few weeks 22 00:01:05,760 --> 00:01:06,320 Speaker 2: of January. 23 00:01:06,440 --> 00:01:07,720 Speaker 3: I think it's fair to say. 24 00:01:07,520 --> 00:01:11,880 Speaker 2: That afterwards the seasonality factors were out and a high 25 00:01:12,000 --> 00:01:16,960 Speaker 2: level of uncertainty and volatility did come in. But you know, 26 00:01:17,040 --> 00:01:19,399 Speaker 2: we you know, the most important issues that if you 27 00:01:19,440 --> 00:01:21,800 Speaker 2: go back in history, you can see how we can 28 00:01:21,880 --> 00:01:24,920 Speaker 2: really perform in a variety of in a variety of 29 00:01:25,120 --> 00:01:26,160 Speaker 2: market conditions. 30 00:01:26,600 --> 00:01:29,039 Speaker 1: Wealth management clearly the biggest profit driver as it has 31 00:01:29,080 --> 00:01:32,120 Speaker 1: been for a long time for ups. How your clients 32 00:01:32,160 --> 00:01:37,040 Speaker 1: within wealth adjusting to the market turmoil or political uncertainty. 33 00:01:37,040 --> 00:01:39,319 Speaker 1: Are they staying on the sidelines, are they looking for 34 00:01:39,400 --> 00:01:41,440 Speaker 1: different products, different asset classes. 35 00:01:42,680 --> 00:01:43,640 Speaker 3: Well, you look at. 36 00:01:45,120 --> 00:01:47,640 Speaker 2: So far, we haven't really seen a major shift in 37 00:01:47,680 --> 00:01:53,280 Speaker 2: asset allocation by clients. And when you look at the 38 00:01:53,280 --> 00:01:58,240 Speaker 2: first quarter and then the first couple of weeks in April, 39 00:01:58,960 --> 00:02:01,880 Speaker 2: you know they took more at of market volatility to 40 00:02:02,280 --> 00:02:09,679 Speaker 2: reposition their exposures within the radio set asset allocation. When 41 00:02:09,680 --> 00:02:12,960 Speaker 2: you look at the last couple of weeks, is fair 42 00:02:13,080 --> 00:02:14,799 Speaker 2: to say that probably there is a little bit of 43 00:02:14,840 --> 00:02:19,680 Speaker 2: fatigue coming in from US, coming from you know, the 44 00:02:19,760 --> 00:02:21,360 Speaker 2: trade tariff's situation. 45 00:02:21,600 --> 00:02:22,800 Speaker 3: So that. 46 00:02:24,360 --> 00:02:26,480 Speaker 2: For the time being, I have to say that despite 47 00:02:26,560 --> 00:02:30,240 Speaker 2: the real significant spike in volatility and huge volumes, we 48 00:02:30,360 --> 00:02:34,400 Speaker 2: saw peaks in volume that exceeded thirty percent of the 49 00:02:34,440 --> 00:02:38,119 Speaker 2: COVID times in the first week in the first couple 50 00:02:38,160 --> 00:02:41,720 Speaker 2: of weeks of the second quarter. So despite all of these, 51 00:02:41,880 --> 00:02:47,160 Speaker 2: clients are quite calm and focus on managing within their 52 00:02:47,160 --> 00:02:47,840 Speaker 2: asset occasion. 53 00:02:48,080 --> 00:02:51,280 Speaker 1: Is that volatility peaking volatility behind us? Now, do you think? 54 00:02:51,720 --> 00:02:52,360 Speaker 3: I don't think so. 55 00:02:52,600 --> 00:02:54,560 Speaker 2: I think that's as I said, probably now there is 56 00:02:54,560 --> 00:02:57,640 Speaker 2: a little bit of settling down. I think markets have 57 00:02:57,760 --> 00:03:03,160 Speaker 2: found probably a new a new dimension in terms of 58 00:03:03,680 --> 00:03:07,519 Speaker 2: where to reconsider things from and now it's going to 59 00:03:07,560 --> 00:03:08,600 Speaker 2: be depending. 60 00:03:08,200 --> 00:03:12,880 Speaker 3: On the developments on the tariff front. I think that 61 00:03:13,320 --> 00:03:15,480 Speaker 3: uncertainty is there. 62 00:03:16,080 --> 00:03:19,839 Speaker 2: It's very positive to see that there are ongoing discussions 63 00:03:19,840 --> 00:03:21,639 Speaker 2: in terms of finding agreements. 64 00:03:22,560 --> 00:03:25,480 Speaker 3: Having say that if this goes. 65 00:03:25,280 --> 00:03:28,160 Speaker 2: On for too long, uncertainty has also a cost, and 66 00:03:28,240 --> 00:03:34,240 Speaker 2: therefore probably investors and corporates will slow down their investment plans. 67 00:03:34,440 --> 00:03:37,840 Speaker 1: How are your private banking clients being impacted by tariffs 68 00:03:38,360 --> 00:03:38,720 Speaker 1: for the. 69 00:03:39,120 --> 00:03:42,520 Speaker 2: Clients themselves directly in their allocation, just as a function 70 00:03:42,600 --> 00:03:45,440 Speaker 2: of markets movements. You know, of course, we have a 71 00:03:45,480 --> 00:03:49,560 Speaker 2: lot of clients who are also entrepreneur business owners, and 72 00:03:49,640 --> 00:03:52,760 Speaker 2: there depends very much where they are. So I think 73 00:03:52,800 --> 00:03:56,680 Speaker 2: the Tarifficie won't be a game in which everybody loses 74 00:03:56,760 --> 00:03:57,640 Speaker 2: or everybody gains. 75 00:03:57,680 --> 00:03:59,960 Speaker 3: Some people will be winners, some people will be losing. 76 00:04:00,240 --> 00:04:04,160 Speaker 1: And is ubs benefiting from that safe haven status that 77 00:04:04,200 --> 00:04:07,680 Speaker 1: Switzerland has as investors diversify out of the US. 78 00:04:08,360 --> 00:04:13,960 Speaker 2: I think that there is not necessarily a geographic or 79 00:04:14,040 --> 00:04:17,600 Speaker 2: booking center issue. We are not seeing that kind of developments. 80 00:04:17,640 --> 00:04:20,440 Speaker 2: I think that, well, it's fair to say that we 81 00:04:20,520 --> 00:04:24,440 Speaker 2: are a global franchise. We have very important activities and 82 00:04:24,440 --> 00:04:28,440 Speaker 2: booking centers in the US, but also when you look 83 00:04:28,480 --> 00:04:32,440 Speaker 2: at Europe in Switzerland, you look at Asia, On Kong, Singapore, 84 00:04:33,160 --> 00:04:37,400 Speaker 2: in Australia and Japan. So our investors have been playing 85 00:04:37,440 --> 00:04:40,640 Speaker 2: the diversification cards for many, many years and so it's 86 00:04:40,680 --> 00:04:41,479 Speaker 2: nothing really new. 87 00:04:41,720 --> 00:04:44,520 Speaker 1: Expanding wealth management in the US is a key priority 88 00:04:44,640 --> 00:04:46,040 Speaker 1: for you and the team. There's still a bit of 89 00:04:46,080 --> 00:04:48,479 Speaker 1: catch up with the likes of Morgan Stanley. What's holding 90 00:04:48,480 --> 00:04:50,240 Speaker 1: the business back there and what does it look like 91 00:04:50,279 --> 00:04:51,479 Speaker 1: by the end of twenty twenty five. 92 00:04:52,040 --> 00:04:54,040 Speaker 2: Well, we are we have a plan on how to 93 00:04:54,720 --> 00:04:57,280 Speaker 2: bring our pre tax profit margins in the US to 94 00:04:57,480 --> 00:04:59,000 Speaker 2: mid teens numbers. 95 00:04:59,040 --> 00:05:00,000 Speaker 3: This is we all. 96 00:05:00,080 --> 00:05:02,400 Speaker 2: We say that our goal in the US is still narrow. 97 00:05:02,560 --> 00:05:05,920 Speaker 2: The gap to our peers because of who we are 98 00:05:05,960 --> 00:05:08,200 Speaker 2: and the size of our operation and the scope of 99 00:05:08,200 --> 00:05:11,120 Speaker 2: our operation in the US is not realistic the thing 100 00:05:11,200 --> 00:05:13,920 Speaker 2: that we're going to close the gap with our main competitors. 101 00:05:13,960 --> 00:05:16,760 Speaker 3: But you know, within that, we believe that. 102 00:05:17,240 --> 00:05:21,039 Speaker 2: You know, the ongoing efforts to work across many dimensions 103 00:05:21,080 --> 00:05:23,159 Speaker 2: to improve profitability are going well. 104 00:05:23,680 --> 00:05:26,919 Speaker 3: You look at the first quarter results we have. 105 00:05:27,440 --> 00:05:30,200 Speaker 2: We had a twelve percent PbD margins, is still short 106 00:05:30,240 --> 00:05:32,400 Speaker 2: of the fifteen percent we want to achieve in the 107 00:05:32,480 --> 00:05:35,640 Speaker 2: next couple of years, but it shows that we are 108 00:05:35,680 --> 00:05:36,680 Speaker 2: moving in the right direction. 109 00:05:36,800 --> 00:05:38,800 Speaker 1: Okay, And you're confident in getting to that fifteen percent 110 00:05:38,880 --> 00:05:39,880 Speaker 1: within that time frame in. 111 00:05:39,880 --> 00:05:42,479 Speaker 3: The US, Yeah, I think we are confident that we 112 00:05:42,520 --> 00:05:42,839 Speaker 3: will do. 113 00:05:42,920 --> 00:05:46,800 Speaker 1: The only capital requirements debate that's unfolding. It seems like 114 00:05:46,839 --> 00:05:49,360 Speaker 1: the SMB, the regulators, is the government not backing down 115 00:05:49,360 --> 00:05:52,479 Speaker 1: in Switzerland in terms of imposing those higher capital requirements. 116 00:05:52,520 --> 00:05:55,040 Speaker 1: Would you in the team be prepared to make structural 117 00:05:55,560 --> 00:05:58,000 Speaker 1: changes changes to the strategy to try to come to 118 00:05:58,040 --> 00:05:59,000 Speaker 1: a compromise. 119 00:05:58,600 --> 00:06:02,200 Speaker 2: On this, Well, okay, think it's not appropriate to speculate 120 00:06:02,240 --> 00:06:04,960 Speaker 2: what we will or we will not do in respect 121 00:06:05,040 --> 00:06:07,040 Speaker 2: of any any changes until we. 122 00:06:07,040 --> 00:06:08,520 Speaker 3: Know exactly what they are. 123 00:06:08,880 --> 00:06:11,480 Speaker 2: When we know what it is, we're going to analyze 124 00:06:11,480 --> 00:06:17,040 Speaker 2: it and and make considerations that are you know, focusing 125 00:06:17,040 --> 00:06:20,000 Speaker 2: on protecting and the interest of our shoreolders. 126 00:06:20,160 --> 00:06:22,800 Speaker 1: I think listening to your concerns, are you able to 127 00:06:22,839 --> 00:06:23,560 Speaker 1: shape the debate? 128 00:06:24,920 --> 00:06:27,200 Speaker 3: I think that one, I don't know. 129 00:06:27,240 --> 00:06:28,920 Speaker 2: I think that the only thing I know that we 130 00:06:28,960 --> 00:06:34,720 Speaker 2: are definitely making efforts in in in contributing to a 131 00:06:34,839 --> 00:06:38,200 Speaker 2: fact based discussion around is very important topics. So I 132 00:06:38,200 --> 00:06:41,000 Speaker 2: think it's very important that whatever decision is taken is 133 00:06:41,040 --> 00:06:45,800 Speaker 2: taken based on facts, not about meath or about any 134 00:06:45,839 --> 00:06:49,320 Speaker 2: other ideological issues. And so we want to make sure that, 135 00:06:50,080 --> 00:06:51,960 Speaker 2: you know, also COLDS are. 136 00:06:52,080 --> 00:06:54,480 Speaker 3: Fully fully aware. 137 00:06:54,200 --> 00:06:57,560 Speaker 2: Of, uh, you know, all the consideration that should be 138 00:06:57,760 --> 00:06:59,880 Speaker 2: analyzed before making such decisions. 139 00:07:00,040 --> 00:07:02,240 Speaker 1: But it's a potential risk to the buyback and the 140 00:07:02,279 --> 00:07:04,520 Speaker 1: dividend plan as you look out to that twenty twenty 141 00:07:04,600 --> 00:07:05,000 Speaker 1: six goal. 142 00:07:05,800 --> 00:07:09,960 Speaker 2: Yeah, it's definitely, you know, I think that our capital 143 00:07:09,960 --> 00:07:14,560 Speaker 2: returns plans are are subject to us delivering on our 144 00:07:14,640 --> 00:07:18,880 Speaker 2: financial targets, us keeping the already very strong capital position 145 00:07:18,960 --> 00:07:22,440 Speaker 2: we have and also no material and immediate change in 146 00:07:22,480 --> 00:07:25,880 Speaker 2: the regulatory framework, but anything that it would be nice 147 00:07:26,040 --> 00:07:31,000 Speaker 2: if any changes would be only limited to the short 148 00:07:31,080 --> 00:07:34,240 Speaker 2: term capital return plans. I think that the consequences of 149 00:07:34,960 --> 00:07:40,680 Speaker 2: the changes are much more profound for the competitiveness not 150 00:07:40,720 --> 00:07:43,000 Speaker 2: only of UBS but the Swiss financial center. 151 00:07:43,120 --> 00:07:45,040 Speaker 1: The integration we create the Swiss ups seems to be 152 00:07:45,120 --> 00:07:46,080 Speaker 1: going quite well. 153 00:07:46,120 --> 00:07:46,680 Speaker 3: This quarter. 154 00:07:47,360 --> 00:07:50,280 Speaker 1: You're doing the migration of Swiss clients onto a single platform. 155 00:07:50,360 --> 00:07:52,880 Speaker 1: Is there a risk to flows during that process? 156 00:07:54,200 --> 00:07:55,120 Speaker 3: Well, you never know, of. 157 00:07:55,080 --> 00:07:58,280 Speaker 2: Course, when you come to the place when the clients 158 00:07:58,280 --> 00:08:02,960 Speaker 2: are moving physically or you know, digitally, not physically but digitally, 159 00:08:03,000 --> 00:08:06,160 Speaker 2: there accounts me. They may make a choice to do 160 00:08:06,280 --> 00:08:08,120 Speaker 2: something else. But if you look at the big chunk 161 00:08:08,160 --> 00:08:10,600 Speaker 2: of clients and the most important I don't see it 162 00:08:10,720 --> 00:08:12,400 Speaker 2: is being a real factor. 163 00:08:12,840 --> 00:08:13,920 Speaker 3: I do see also. 164 00:08:13,640 --> 00:08:18,720 Speaker 2: An opportunity for us really under the same it operation, 165 00:08:18,920 --> 00:08:22,920 Speaker 2: the same service and product offerings, to expand our business 166 00:08:23,000 --> 00:08:25,480 Speaker 2: and to create a win win also for our for 167 00:08:25,600 --> 00:08:29,040 Speaker 2: our clients or will benefits also from a more expanded 168 00:08:29,080 --> 00:08:30,360 Speaker 2: and comprehensive offering. 169 00:08:30,760 --> 00:08:33,600 Speaker 1: We've reported Bloomberg's reported that you're in you're in talks 170 00:08:33,640 --> 00:08:37,200 Speaker 1: with General Atlantic. They are, of course the alternative asset 171 00:08:37,240 --> 00:08:41,720 Speaker 1: management firm potentially around a strategic partnership focused on private credit. 172 00:08:41,840 --> 00:08:44,080 Speaker 1: Are you able to confirm the talks are taking place, 173 00:08:44,080 --> 00:08:45,040 Speaker 1: that talks are taking place. 174 00:08:45,559 --> 00:08:48,760 Speaker 2: Well, look the area of private credit and how to 175 00:08:48,880 --> 00:08:51,480 Speaker 2: enhance our tool kit, you know, how to help our 176 00:08:52,040 --> 00:08:56,720 Speaker 2: clients to to to to with the best products and capabilities. 177 00:08:56,040 --> 00:08:58,160 Speaker 3: Are always a consideration. 178 00:08:58,720 --> 00:09:02,920 Speaker 2: But it's not appropriate for me to comment on even 179 00:09:02,920 --> 00:09:04,160 Speaker 2: Bloomberg speculations. 180 00:09:04,240 --> 00:09:07,760 Speaker 1: Okay, but pushing into private credit is a key strategy, 181 00:09:07,840 --> 00:09:09,439 Speaker 1: key priority, and you'll be working on that. 182 00:09:09,920 --> 00:09:10,240 Speaker 3: I think. 183 00:09:10,360 --> 00:09:13,120 Speaker 2: Is why, as I said, is what is one of 184 00:09:13,200 --> 00:09:17,920 Speaker 2: the toolkit we need to give our clients access to 185 00:09:18,080 --> 00:09:20,960 Speaker 2: financing and so on. That is, you know, it is 186 00:09:20,960 --> 00:09:24,280 Speaker 2: as strategic as and many other things we do on FX. 187 00:09:24,360 --> 00:09:26,480 Speaker 1: Before we let you go, the swissly strength up about 188 00:09:26,480 --> 00:09:28,839 Speaker 1: ten percent versus the US dollar year today. A lot 189 00:09:28,840 --> 00:09:30,800 Speaker 1: of your revenues coming through from the US dollar, particularly 190 00:09:30,800 --> 00:09:32,640 Speaker 1: when it comes to global wealth management business, A lot 191 00:09:32,640 --> 00:09:36,200 Speaker 1: of the cost is in Swiss francs. Some investors questioning 192 00:09:36,200 --> 00:09:38,320 Speaker 1: the fundamentals of the US dollar. How are you thinking 193 00:09:38,320 --> 00:09:39,800 Speaker 1: about those dynamics going forward? 194 00:09:41,040 --> 00:09:43,200 Speaker 2: Well, look, you know, if you look at the dollar 195 00:09:44,240 --> 00:09:46,839 Speaker 2: and any in general, I would say more the other 196 00:09:46,880 --> 00:09:50,160 Speaker 2: way around. So his friends has been strengthening against many 197 00:09:50,240 --> 00:09:53,240 Speaker 2: current main currencies for decades now. 198 00:09:53,520 --> 00:09:55,640 Speaker 3: So from our standpoint. 199 00:09:55,200 --> 00:09:58,680 Speaker 2: Of view, if you look at our weeks of effects 200 00:09:58,679 --> 00:10:02,240 Speaker 2: exposure between even costs, they are quite balanced. I mean, 201 00:10:02,440 --> 00:10:06,120 Speaker 2: maybe a little bit of you know, on the Swiss 202 00:10:06,120 --> 00:10:10,080 Speaker 2: side versus sorry on on the on the wealth management side, 203 00:10:10,080 --> 00:10:11,439 Speaker 2: and on the A B side where we have a 204 00:10:11,480 --> 00:10:14,360 Speaker 2: little bit more cost in in in in pounds for 205 00:10:14,480 --> 00:10:17,880 Speaker 2: the A B. But generally speaking, I think effects it's 206 00:10:17,920 --> 00:10:19,839 Speaker 2: not a major factor for us.