Speaker 1: Bloomberg Audio Studios, podcasts, radio news. So Jo, thank you
Speaker 1: very much for your time. A beat, of course when
Speaker 1: it comes to profits in terms of revenue, and the
Speaker 1: Global Markets team performing very well, the best quarter on
Speaker 1: record for them. If we were looking for soft spots,
Speaker 1: maybe in terms of the estimates, a bit of a
Speaker 1: miss when it comes to asset management and wealth, but
Speaker 1: the flows are still there. Earnings per share is a
Speaker 1: beat as well. To those trends, particularly when it comes
Speaker 1: to the volatility that you've seen and the upside gains
Speaker 1: for the Global Markets team in the first court. Do
Speaker 1: you expect those trends to continue in the quarters ahead.
Speaker 2: Well, first of all, I have to say that I'm
Speaker 2: particularly happy to see our results because they underline the
Speaker 2: real value of our global leriasify to franchise, and also
Speaker 2: when you look at Wealth Management, as to the management
Speaker 2: and the investment banking board are delivered double digit.
Speaker 3: Pre tax profit expansion.
Speaker 2: Our core businesses at combined fifteen percent expansion. So I
Speaker 2: think it's of course, so we saw a little bit
Speaker 2: of seasonality, positive seasonality, particularly in the first few weeks
Speaker 2: of January.
Speaker 3: I think it's fair to say.
Speaker 2: That afterwards the seasonality factors were out and a high
Speaker 2: level of uncertainty and volatility did come in. But you know,
Speaker 2: we you know, the most important issues that if you
Speaker 2: go back in history, you can see how we can
Speaker 2: really perform in a variety of in a variety of
Speaker 2: market conditions.
Speaker 1: Wealth management clearly the biggest profit driver as it has
Speaker 1: been for a long time for ups. How your clients
Speaker 1: within wealth adjusting to the market turmoil or political uncertainty.
Speaker 1: Are they staying on the sidelines, are they looking for
Speaker 1: different products, different asset classes.
Speaker 3: Well, you look at.
Speaker 2: So far, we haven't really seen a major shift in
Speaker 2: asset allocation by clients. And when you look at the
Speaker 2: first quarter and then the first couple of weeks in April,
Speaker 2: you know they took more at of market volatility to
Speaker 2: reposition their exposures within the radio set asset allocation. When
Speaker 2: you look at the last couple of weeks, is fair
Speaker 2: to say that probably there is a little bit of
Speaker 2: fatigue coming in from US, coming from you know, the
Speaker 2: trade tariff's situation.
Speaker 3: So that.
Speaker 2: For the time being, I have to say that despite
Speaker 2: the real significant spike in volatility and huge volumes, we
Speaker 2: saw peaks in volume that exceeded thirty percent of the
Speaker 2: COVID times in the first week in the first couple
Speaker 2: of weeks of the second quarter. So despite all of these,
Speaker 2: clients are quite calm and focus on managing within their
Speaker 2: asset occasion.
Speaker 1: Is that volatility peaking volatility behind us? Now, do you think?
Speaker 3: I don't think so.
Speaker 2: I think that's as I said, probably now there is
Speaker 2: a little bit of settling down. I think markets have
Speaker 2: found probably a new a new dimension in terms of
Speaker 2: where to reconsider things from and now it's going to
Speaker 2: be depending.
Speaker 3: On the developments on the tariff front. I think that
Speaker 3: uncertainty is there.
Speaker 2: It's very positive to see that there are ongoing discussions
Speaker 2: in terms of finding agreements.
Speaker 3: Having say that if this goes.
Speaker 2: On for too long, uncertainty has also a cost, and
Speaker 2: therefore probably investors and corporates will slow down their investment plans.
Speaker 1: How are your private banking clients being impacted by tariffs
Speaker 1: for the.
Speaker 2: Clients themselves directly in their allocation, just as a function
Speaker 2: of markets movements. You know, of course, we have a
Speaker 2: lot of clients who are also entrepreneur business owners, and
Speaker 2: there depends very much where they are. So I think
Speaker 2: the Tarifficie won't be a game in which everybody loses
Speaker 2: or everybody gains.
Speaker 3: Some people will be winners, some people will be losing.
Speaker 1: And is ubs benefiting from that safe haven status that
Speaker 1: Switzerland has as investors diversify out of the US.
Speaker 2: I think that there is not necessarily a geographic or
Speaker 2: booking center issue. We are not seeing that kind of developments.
Speaker 2: I think that, well, it's fair to say that we
Speaker 2: are a global franchise. We have very important activities and
Speaker 2: booking centers in the US, but also when you look
Speaker 2: at Europe in Switzerland, you look at Asia, On Kong, Singapore,
Speaker 2: in Australia and Japan. So our investors have been playing
Speaker 2: the diversification cards for many, many years and so it's
Speaker 2: nothing really new.
Speaker 1: Expanding wealth management in the US is a key priority
Speaker 1: for you and the team. There's still a bit of
Speaker 1: catch up with the likes of Morgan Stanley. What's holding
Speaker 1: the business back there and what does it look like
Speaker 1: by the end of twenty twenty five.
Speaker 2: Well, we are we have a plan on how to
Speaker 2: bring our pre tax profit margins in the US to
Speaker 2: mid teens numbers.
Speaker 3: This is we all.
Speaker 2: We say that our goal in the US is still narrow.
Speaker 2: The gap to our peers because of who we are
Speaker 2: and the size of our operation and the scope of
Speaker 2: our operation in the US is not realistic the thing
Speaker 2: that we're going to close the gap with our main competitors.
Speaker 3: But you know, within that, we believe that.
Speaker 2: You know, the ongoing efforts to work across many dimensions
Speaker 2: to improve profitability are going well.
Speaker 3: You look at the first quarter results we have.
Speaker 2: We had a twelve percent PbD margins, is still short
Speaker 2: of the fifteen percent we want to achieve in the
Speaker 2: next couple of years, but it shows that we are
Speaker 2: moving in the right direction.
Speaker 1: Okay, And you're confident in getting to that fifteen percent
Speaker 1: within that time frame in.
Speaker 3: The US, Yeah, I think we are confident that we
Speaker 3: will do.
Speaker 1: The only capital requirements debate that's unfolding. It seems like
Speaker 1: the SMB, the regulators, is the government not backing down
Speaker 1: in Switzerland in terms of imposing those higher capital requirements.
Speaker 1: Would you in the team be prepared to make structural
Speaker 1: changes changes to the strategy to try to come to
Speaker 1: a compromise.
Speaker 2: On this, Well, okay, think it's not appropriate to speculate
Speaker 2: what we will or we will not do in respect
Speaker 2: of any any changes until we.
Speaker 3: Know exactly what they are.
Speaker 2: When we know what it is, we're going to analyze
Speaker 2: it and and make considerations that are you know, focusing
Speaker 2: on protecting and the interest of our shoreolders.
Speaker 1: I think listening to your concerns, are you able to
Speaker 1: shape the debate?
Speaker 3: I think that one, I don't know.
Speaker 2: I think that the only thing I know that we
Speaker 2: are definitely making efforts in in in contributing to a
Speaker 2: fact based discussion around is very important topics. So I
Speaker 2: think it's very important that whatever decision is taken is
Speaker 2: taken based on facts, not about meath or about any
Speaker 2: other ideological issues. And so we want to make sure that,
Speaker 2: you know, also COLDS are.
Speaker 3: Fully fully aware.
Speaker 2: Of, uh, you know, all the consideration that should be
Speaker 2: analyzed before making such decisions.
Speaker 1: But it's a potential risk to the buyback and the
Speaker 1: dividend plan as you look out to that twenty twenty
Speaker 1: six goal.
Speaker 2: Yeah, it's definitely, you know, I think that our capital
Speaker 2: returns plans are are subject to us delivering on our
Speaker 2: financial targets, us keeping the already very strong capital position
Speaker 2: we have and also no material and immediate change in
Speaker 2: the regulatory framework, but anything that it would be nice
Speaker 2: if any changes would be only limited to the short
Speaker 2: term capital return plans. I think that the consequences of
Speaker 2: the changes are much more profound for the competitiveness not
Speaker 2: only of UBS but the Swiss financial center.
Speaker 1: The integration we create the Swiss ups seems to be
Speaker 1: going quite well.
Speaker 3: This quarter.
Speaker 1: You're doing the migration of Swiss clients onto a single platform.
Speaker 1: Is there a risk to flows during that process?
Speaker 3: Well, you never know, of.
Speaker 2: Course, when you come to the place when the clients
Speaker 2: are moving physically or you know, digitally, not physically but digitally,
Speaker 2: there accounts me. They may make a choice to do
Speaker 2: something else. But if you look at the big chunk
Speaker 2: of clients and the most important I don't see it
Speaker 2: is being a real factor.
Speaker 3: I do see also.
Speaker 2: An opportunity for us really under the same it operation,
Speaker 2: the same service and product offerings, to expand our business
Speaker 2: and to create a win win also for our for
Speaker 2: our clients or will benefits also from a more expanded
Speaker 2: and comprehensive offering.
Speaker 1: We've reported Bloomberg's reported that you're in you're in talks
Speaker 1: with General Atlantic. They are, of course the alternative asset
Speaker 1: management firm potentially around a strategic partnership focused on private credit.
Speaker 1: Are you able to confirm the talks are taking place,
Speaker 1: that talks are taking place.
Speaker 2: Well, look the area of private credit and how to
Speaker 2: enhance our tool kit, you know, how to help our
Speaker 2: clients to to to to with the best products and capabilities.
Speaker 3: Are always a consideration.
Speaker 2: But it's not appropriate for me to comment on even
Speaker 2: Bloomberg speculations.
Speaker 1: Okay, but pushing into private credit is a key strategy,
Speaker 1: key priority, and you'll be working on that.
Speaker 3: I think.
Speaker 2: Is why, as I said, is what is one of
Speaker 2: the toolkit we need to give our clients access to
Speaker 2: financing and so on. That is, you know, it is
Speaker 2: as strategic as and many other things we do on FX.
Speaker 1: Before we let you go, the swissly strength up about
Speaker 1: ten percent versus the US dollar year today. A lot
Speaker 1: of your revenues coming through from the US dollar, particularly
Speaker 1: when it comes to global wealth management business, A lot
Speaker 1: of the cost is in Swiss francs. Some investors questioning
Speaker 1: the fundamentals of the US dollar. How are you thinking
Speaker 1: about those dynamics going forward?
Speaker 2: Well, look, you know, if you look at the dollar
Speaker 2: and any in general, I would say more the other
Speaker 2: way around. So his friends has been strengthening against many
Speaker 2: current main currencies for decades now.
Speaker 3: So from our standpoint.
Speaker 2: Of view, if you look at our weeks of effects
Speaker 2: exposure between even costs, they are quite balanced. I mean,
Speaker 2: maybe a little bit of you know, on the Swiss
Speaker 2: side versus sorry on on the on the wealth management side,
Speaker 2: and on the A B side where we have a
Speaker 2: little bit more cost in in in in pounds for
Speaker 2: the A B. But generally speaking, I think effects it's
Speaker 2: not a major factor for us.