(Bloomberg) -- UBS Group AG Chief Executive Officer Sergio Ermotti said investors should heed last week’s global selloff as a sign of “fragility in the system.”
“For the markets and for many investors what happened early on this month has been a wake up call,” Ermotti said in a Bloomberg TV interview after the bank’s second-quarter earnings. “The magnitude of the movements should make people think carefully about having a proper diversification and being very thoughtful about the way you invest money.”
Zurich-based UBS is one one of the biggest money managers in the world and benefits from shifts in client portfolios as well as from higher volatility in markets, which boosts trading income. The bank reported better-than expected profits in the second quarter as the bank forges ahead with the integration of Credit Suisse.
For Ermotti, one of the big changes in client behavior over the last two years has been a move toward more investments into fixed income.
One outstanding issue for UBS and its shareholders is the prospect of tougher Swiss regulation, which could see the nation’s biggest bank hit with billions more in extra capital requirements.
“We will find out probably later this year, early 2025 the direction of travel,” Ermotti said, striking a more circumspect tone than previously. “Then we can make an assessment.”
The UBS chief added that he doesn’t expect the new rules to impact the bank’s plans for capital distribution. UBS continues to target up to $1 billion in share buybacks in 2024, and has previously announced plans to repurchase some $2 billion overall by 2026.
--With assistance from Levin Stamm.
©2024 Bloomberg L.P.
