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Speaker 1: So marine, thank you very much for joining us. It's

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Speaker 1: a pleasure to have you. You've been doing a bit of

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Speaker 1: traveling recently. You were in the US, you're here in

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Speaker 1: Beijing now. I'm sure clients, partners, regulators have lots of

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Speaker 1: questions for you about how the integration of CREDITSMIS is going.

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Speaker 1: What sorts of questions are you getting and how are

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Speaker 1: you responding well.

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Speaker 2: First of all, I think that.

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Speaker 3: It's normal that we have to respond to those questions.

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Speaker 3: What happened was over the weekend back in March was

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Speaker 3: quite extraordinary. But I'm happy to be able to report

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Speaker 3: that things are progressing very well.

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Speaker 2: We made shift very swift.

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Speaker 3: Progress in integrating credits with we close the transaction in

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Speaker 3: record times, also thanks to the big cooperation of regulators

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Speaker 3: across the globe. And that's one of the reasons why

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Speaker 3: I'm also here today in Beijing, because I you know,

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Speaker 3: this is my first trip to Asia since taking on

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Speaker 3: again in my role at UBS, and I think it's

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Speaker 3: very important for me to reach out to all the

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Speaker 3: Chinese stakeholders and reiterate our commitment to China while also

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Speaker 3: updating them on the integration.

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Speaker 1: So I do know that here in China UBS has

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Speaker 1: a securities venture. Credits Swiss also had a securities venture.

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Speaker 1: It would seem to make sense to sell out of

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Speaker 1: the Credit Swiss venture. Is that something you're pursuing now, Well.

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Speaker 3: We are currently evaluating the best options. Of course, we

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Speaker 3: are not allowed to have to to operations, but we

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Speaker 3: need to really understand exactly how to do that.

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Speaker 2: We are very happy with our historical.

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Speaker 3: Operation here in China that we were the first to

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Speaker 3: the license as a foreign investors to own and a

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Speaker 3: controlled stake. So it's a very important element of our

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Speaker 3: strategy in China, and now we need to exactly evaluate

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Speaker 3: how to integrate or how to what to do with

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Speaker 3: the CS operation.

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Speaker 1: Sort of how far have you progressed in that process?

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Speaker 1: Are you looking at potential buyers, are you talking to

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Speaker 1: anyone yet or is it not gotten to that place

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Speaker 1: at this stage.

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Speaker 2: We are examining the situation, Okay.

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Speaker 1: In your second quarter results it mentioned specifically that client confidence,

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Speaker 1: sentiment and activity here in Asia was muted. Are you

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Speaker 1: still finding that's the case into the third quarter.

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Speaker 3: Well, I think that we saw in general a little

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Speaker 3: pick up across the globals in Asia in terms of

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Speaker 3: client activity. So the most important topic for us was

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Speaker 3: to see the returns of assets that left credit sweech.

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Speaker 3: In Q four Q one this year we started to

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Speaker 3: see assets coming back at prettitewich towards the end of

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Speaker 3: the second quarter. We see also very good momentum in

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Speaker 3: Q three, So that's the most important issue. But also

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Speaker 3: in general, it's fair to say that investors are more

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Speaker 3: constructive than they have been.

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Speaker 2: Recently.

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Speaker 1: So on the momentum you talked about. In Q three

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Speaker 1: there was a net new money and flow about sixteen

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Speaker 1: billion US dollars and two Q you said at the

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Speaker 1: time you expected that to continue. What is it looking

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Speaker 1: like in three Q What does good momentum mean?

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Speaker 3: Well, I mean we are pursuing similar patterns, so we

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Speaker 3: are not going to be specific on numbers. The quarter

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Speaker 3: is still ongoing, but the most important issues that we

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Speaker 3: see substantial substance, actually our our forecast being confirmed and

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Speaker 3: we are getting to the close of the quarters. So

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Speaker 3: I think that that's very encouraging to see that so quickly.

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Speaker 3: Our our clients are responding to our actions to stabilize

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Speaker 3: credit suits and and and and to and to offer

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Speaker 3: them the best of the combined organizations.

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Speaker 1: And the two hundred billion US dollars you were talking

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Speaker 1: about that That was was withdrawn from Chris Weiss in

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Speaker 1: the final days before the takeover. How much progress have

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Speaker 1: you made in getting that back as well?

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Speaker 3: Yeah, we have to say part of it was already

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Speaker 3: landing at ubs. But as we say it, in the

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Speaker 3: second quarter, already we saw some of that coming back.

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Speaker 3: We see it now in the in the third quarter.

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Speaker 3: It's gonna take it's gonna take a few quarters to

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Speaker 3: regain a big you know, getting back everything is going

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Speaker 3: to be almost impossible. But our aim is to recapture

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Speaker 3: as much as possible.

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Speaker 1: In Asia, I believe in the second quarter there was

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Speaker 1: a net money and flow about one point eight or

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Speaker 1: so billion US dollars in Asia. Do you see a

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Speaker 1: similar sort of trajectory in the third quarters.

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Speaker 3: Yeah, we see positive trends across the globe in each region.

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Speaker 1: What about here in China, what does the sentiment feel like,

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Speaker 1: not only here, but like globally, the perception of China

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Speaker 1: and Chinese assets.

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Speaker 3: Well, look, in general in the globe, you know, we

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Speaker 3: are going through very challenging times in terms of macroeconomic

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Speaker 3: In terms of the macroeconomic picture, of course, the geopolitical

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Speaker 3: tensions are not helping at this stage, you know, but

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Speaker 3: I do believe that many investors still sees the long

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Speaker 3: term potential of China. It's exactly how to navigate the

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Speaker 3: current situation that makes our job.

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Speaker 2: Even more important.

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Speaker 3: We are not only here in China, but also abroad,

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Speaker 3: are helping clients to understand China, how to invest into China,

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Speaker 3: and also for Chinese investor or how to invest abroad.

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Speaker 3: So I think that we see this situation as an

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Speaker 3: evolution of almost natural evolution of things that happen over

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Speaker 3: the last ten fifteen years. The macroeconomic, the geopolitical picture

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Speaker 3: has changed completely, and you know this is part of

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Speaker 3: the journey.

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Speaker 1: When your employees here in China, when regulators here in China,

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Speaker 1: our clients partners ask now do you have plans for

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Speaker 1: more investment? What are your plans for China as part

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Speaker 1: of the new UBS? How do you respond?

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Speaker 3: Well, we responded, we have been here in China for

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Speaker 3: thirty years.

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Speaker 2: We were one of the first to.

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Speaker 3: Be in China, and to make substantial investments is exactly

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Speaker 3: the visit for the reason for my visit is here

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Speaker 3: to be to reiterate our commitment that we see China

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Speaker 3: as an important.

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Speaker 2: Driver for growth for US.

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Speaker 3: Right now, we are very busy in integrating credit suits.

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Speaker 3: We are very busy in managing our current business, staying

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Speaker 3: close to clients, but we are not losing sight of

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Speaker 3: the opportunities that are still there to grow organically, both

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Speaker 3: in the US but also in Asia and particularly here

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Speaker 3: in China.

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Speaker 1: Recently, there was a Bank of America survey of global

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Speaker 1: investors that identified Chinese property as the thing that people

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Speaker 1: thought most likely could cause the next global credit event.

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Speaker 1: Where is the rank for you in terms of US.

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Speaker 3: Well, we know that almost any major crisis, if there

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Speaker 3: is one, is triggered by either a real estate crisis

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Speaker 3: or a government debt crisis. So I think it's quite

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Speaker 3: clear that the situation in China is fragile around the

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Speaker 3: real estate sectors. Government is taking actions to contain and

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Speaker 3: to help manage this very.

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Speaker 2: Difficult situations.

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Speaker 3: But of course, if there is one part of the

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Speaker 3: economy that is exposed to potential threat is the real

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Speaker 3: estate sector.

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Speaker 1: Is is UBS taking any actions to try and mitigate

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Speaker 1: potential risk.

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Speaker 3: No, we we have very limited direct exposure, so we

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Speaker 3: are here in China mainly helping clients manage their their wealth,

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Speaker 3: doing advisory through through the investment banking part and wealth management.

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Speaker 3: So we are not directly involved in lending in the

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Speaker 3: Chinese property markets.

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Speaker 1: So the back to the integration of cursits. It's taken

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Speaker 1: your headcount your staff into about one hundred and twenty

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Speaker 1: thousand globally, and you've talked about pretty forthcoming about the

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Speaker 1: need to reduce that number. How much of a reduction

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Speaker 1: do you think is needed At the end of the.

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Speaker 3: Day, I never really spoke about the need of reducing

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Speaker 3: at count because it's not my and it's not our philosophy.

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Speaker 3: What we need to do is to restructure the bank.

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Speaker 3: Securities is needed to be restructured, profoundly, restructure because out

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Speaker 3: of the situation, and then we need to extract the

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Speaker 3: synergies that are necessary to make both businesses viable and stronger.

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Speaker 3: So we are taking actions as we speak to resize

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Speaker 3: the business. We are also taking advantage of the fact

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Speaker 3: that we had a natural attrition that is helping across

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Speaker 3: the globe. We have demographic trends helping in that and

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Speaker 3: people exiting the.

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Speaker 2: Bank through.

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Speaker 3: Retirements or early retirements. We are working also in facilitating

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Speaker 3: movements of people within the bank, also between the two

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Speaker 3: banks as we speak. So I think that I am

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Speaker 3: comfortable that we can mitigate the painful part of the job,

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Speaker 3: which is the social cost. But it's very necessary in

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Speaker 3: order to create a business that is sustainable.

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Speaker 1: And that resizing of the business. How do you think

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Speaker 1: that will look across different geographies, be it America, Europe,

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Speaker 1: Switzerland and here in China.

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Speaker 3: I think I don't see any particular country being more

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Speaker 3: or less affected than others. I think it's generally speaking,

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Speaker 3: there is a need to.

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Speaker 2: Take actions across the board.

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Speaker 1: What about across the division's ubs itself, do you see

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Speaker 1: any difference?

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Speaker 3: No, I think the business uh the areas where we

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Speaker 3: we we we're going to see the most impactful impacts

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Speaker 3: of the restructuring is definitely going to be the investment bank,

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Speaker 3: because of course we the investment bank, and everything which

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Speaker 3: has to do with non core assets will be the

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Speaker 3: one piece that we contribute half of the cost synergies

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Speaker 3: we want to achieve therefore is a meaningful part. But

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Speaker 3: in general every other segment will contribute. Real estate, food

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Speaker 3: print is an example, corporate center functions, uh IT, infrastructure

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Speaker 3: across the board. Also in our SWEECE operation UH and

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Speaker 3: in wealth management.

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Speaker 2: So it's it's very.

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Speaker 3: Difficult to see areas that are not subject to you know, rationalization.

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Speaker 1: The investment bank a credit Swiss, it seems like that

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Speaker 1: the plan is to reduce by as much as about

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Speaker 1: two thirds of that business. What is the plan for

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Speaker 1: the business the part of that business that you keep,

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Speaker 1: how do you want to integrate it with the overall

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Speaker 1: UBS investment banking operation.

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Speaker 3: The vast majority of the operations we are keeping are

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Speaker 3: the one that are extremely complementary to our franchisees in

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Speaker 3: the investment banking part in the US and also here

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Speaker 3: in Asia, particularly in Southeast Asia and.

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Speaker 2: In Europe and Switzerland.

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Speaker 3: So basically M and A capital markets activities relationship with

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Speaker 3: corporates financial sponsors. We focus mainly on TMT on healthcare

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Speaker 3: consumer financial sponsors and that's the area where we're going

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Speaker 3: to keep the most capabilities at from credit suits will

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Speaker 3: enable both firms to be more competitive.

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Speaker 1: That geographic split sort of a Southeast Asia US PRES

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Speaker 1: is that also reflective of where you see the most

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Speaker 1: growth coming in the new term.

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Speaker 3: We see growth coming from organically from two one is

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Speaker 3: the AGA Yes, a year across the wold China included,

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Speaker 3: and also the US. So that's where we are. Also,

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Speaker 3: as I mentioned before, we are focusing on integration, but

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Speaker 3: we can't forget that, you know, we still have ambitions

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Speaker 3: to grow beyond and actually now having five point five

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Speaker 3: trillions of clients assets, having a stronger asset management capabilities.

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Speaker 3: Both from our regional standpoint of view, I think at

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Speaker 3: this very successful joint venture we have here in China

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Speaker 3: with the ICBC, think about the alternative space that we

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Speaker 3: are occupying in a more meaningful way.

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Speaker 2: Also in the US we have we have opportunities.

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Speaker 3: That will enable us to have even an even stronger

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Speaker 3: platform to start to grow organically going forward.

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Speaker 1: So does that mean when you say resize the business,

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Speaker 1: that means while some parts of the business might see

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Speaker 1: a reduction and headcount, other parts might actually see an increase.

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Speaker 3: Of course, I mean, look, you know the issues that

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Speaker 3: what we need to do is we need to rationalize

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Speaker 3: and resize the cost space, make it fit, make it resilient,

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Speaker 3: and then prepare for growth. I'm pretty convinced that and

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Speaker 3: that's the reason why I think that the platform will

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Speaker 3: be unique for any talents that warn't work.

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Speaker 2: In this industry to grow and to have a great career.

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Speaker 3: So I think that as we do that and we

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Speaker 3: stay close to clients that try to give them the

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Speaker 3: best of the combined platform, we're gonna we're gonna hire people.

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Speaker 3: We're gonna have to, you know, attract the best talents

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Speaker 3: and retain the best talents.

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Speaker 1: Is there one part of the business, either geographically or

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Speaker 1: otherwise that that growth will be most pronounced. Do you

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Speaker 1: think an increase in headcount?

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Speaker 2: I don't. I don't really see that.

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Speaker 3: I mean from a from a again, probably Asia and

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Speaker 3: in the us R the years where we are likely

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Speaker 3: to grow more.

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Speaker 2: Relative to the relative to the others. Right.

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Speaker 1: The other thing you mentioned the non core businesses, and

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Speaker 1: by the end of June, I think there was about

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Speaker 1: fifty five billion of risk weighted assets that have been

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Speaker 1: put into a non core arm, sort of a wind

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Speaker 1: down arm. Do you see that growing much more more

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Speaker 1: being put into that unit or is it about right now? No.

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Speaker 3: As we mentioned at during the Q two results presentation,

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Speaker 3: the perimeter around non core assets is broadly finalized. We

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Speaker 3: are doing it as we speak, literally, as we close

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Speaker 3: the third quarter, we're going to thend the facto.

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Speaker 2: Confirm that this is more or less what we say

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Speaker 2: is going to be.

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Speaker 3: So we do have a little bit of changes, but

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Speaker 3: they are not really relevant and meaningful. And what we

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Speaker 3: will now report in the second quarter results of the

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Speaker 3: allocation of a risk operational risks with greitter assets of

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Speaker 3: the entire non core legacy, and then we will continue

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Speaker 3: to execute on the wind down of this part of

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Speaker 3: the balance sheet. Why most importantly addressing the cost base

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Speaker 3: that is there to sustain those assets, because this is

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Speaker 3: probably the most meaningful opportunity and priority that we have

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Speaker 3: is to take down the cost seeded with the non

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Speaker 3: core and the legacy ib infrastructure of cretitsis.

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Speaker 1: So ultimately it could be slightly more than fifty five billion,

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Speaker 1: but not relevant. And I think you've said before that

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Speaker 1: you expect the wind down to conclude in twenty twenty six.

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Speaker 1: Is that still the case.

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Speaker 3: No, What we say is that we expect half of

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Speaker 3: the position half of these positions to naturally decay by

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Speaker 3: the end of twenty twenty six, so without us taking

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Speaker 3: any action. So obviously we're not gonna sit on those

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Speaker 3: positions waiting for natural decay. We're gonna take actions to

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Speaker 3: reduce it. But our aim is to do it, to

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Speaker 3: do that at economical accreative levels for our shoholders, so

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Speaker 3: we are not a forced sellers. I mean, at the

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Speaker 3: end of the day, even today is less than ten

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Speaker 3: percent of our which quitted us, so it's not a

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Speaker 3: meaningful amount of exposure, and by twenty twenty six is

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Speaker 3: going to be less than five percent. So you know

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Speaker 3: you can count that we're going to do it while

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Speaker 3: preserving value for our shoulders.

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Speaker 1: So we're just talking about all the travel you're doing recently,

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Speaker 1: you as London here in Beijing. Now, why did you

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Speaker 1: feel the need to get on a plane this month

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Speaker 1: and do all this traveling?

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Speaker 3: Well, I think that's Asia and particularly in China is

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Speaker 3: a very important operation for us, not only for now

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Speaker 3: but also.

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Speaker 2: For the future.

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Speaker 3: So I think that reaching out to our most important

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Speaker 3: stakeholders to give them an update on where we stand

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Speaker 3: on the integration, our plans for the future at UBS,

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Speaker 3: I think was very very important.

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Speaker 1: Does the travel get in the way of all the

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Speaker 1: integration and all the other work you have to do

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Speaker 1: at home?

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Speaker 3: Not Because in the first one hundred days I stayed

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Speaker 3: in Zurich, focus on preparing the closing of the transactions.

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Speaker 3: Also the other steps that we announced during the summer,

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Speaker 3: giving back the guarantees to the government, returning all the

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Speaker 3: liquidity facilities, preparing for the second quarter presentations.

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Speaker 2: And now that this is done, it's time

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Speaker 3: For me to go out and reach out to our

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Speaker 3: most important stakeholders,