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UBS is facing pressure regarding its relationship with the Swiss Federal Council, prompting banking analyst Stefan Stalmann to suggest that relocating its headquarters should be elevated to "Plan B." While New York is seen as the most viable alternative, the move could incur significant costs and asset losses. Tensions over new capital requirements have intensified, complicating the bank's integration of Credit Suisse and raising concerns about regulatory pressures.
The SVP supports limiting investment banking at UBS to reduce capital requirements, proposing that it should not exceed 30% of total business. This approach aims to mitigate risks without demanding full capital backing for foreign subsidiaries, despite skepticism from experts about its effectiveness.
UBS has seen its market capitalization stagnate at around $106 billion, recently overtaken by Spain's Santander, which has surged to $107 billion amid a 50% rise in share price this year. European banks are benefiting from rising interest rates, with BNP Paribas nearing the $100 billion mark and analysts optimistic about future growth. J.P. Morgan has raised its price target for UBS, reflecting confidence in its potential despite current challenges.
Markus Rohrbasser, the former head of UBS North America, has been ordered to pay over $4.9 million to the IRS for failing to report his Swiss bank accounts from 2003 to 2013. A US District Court in Connecticut imposed penalties and interest after he concealed these accounts during his tenure at UBS and later at Zurich Insurance Group, where he was involved in significant acquisitions. Rohrbasser, who led UBS's investment banking expansion in the 1990s, is currently active on several boards of directors.
The mortgage market is tightening as banks become more cautious in granting residential construction loans, influenced by the loss of Credit Suisse and new Basel III capital requirements. Experts note that capital scarcity is leading to higher margins for customers, while alternative mortgage providers are currently absent from the market. The situation is expected to persist, with many brokers having reduced operations or closed down entirely.
UBS is contemplating relocating its headquarters due to costly capital regulations, which could require raising $20 to $25 billion in equity, impacting profits significantly. A move could lead to a loss of client assets in Switzerland, weakening its most profitable market, while also facing operational and regulatory challenges in potential new locations like the USA, London, or Singapore. Despite the allure of relocation, UBS risks losing market share and would need years to establish a stronger presence in the U.S. wealth market.
"Game Over" premiered in Zurich, detailing the downfall of Credit Suisse, starting from the Chiasso scandal in the 1970s. The film critiques a series of greedy managers, highlighting their role in the bank's collapse while also showcasing the victims of its corrupt practices, including the Mozambique Tuna bonds scandal. Richard J. Chandler, a long-time employee, defended the bank's Swiss operations, suggesting not all was negative.
Lara Warner, former compliance and risk management head at Credit Suisse, was fined CHF 100,000 for failing to report suspected money laundering linked to the Mozambique scandal, where $2 billion was misused. Despite her claims of compliance, the Federal Department of Finance criticized her for not proactively reporting suspicious transactions. The case has drawn further scrutiny, with the Office of the Attorney General investigating her actions alongside a former CS employee and UBS.
UBS has removed all references to Diversity, Equity, and Inclusion (DE&I) from its 2024 annual report, including the goals set in previous years. The bank's commitment to a diverse and inclusive workplace remains, but specific diversity targets and terminology have been significantly reduced or eliminated.
UBS CEO Sergio Ermotti's salary for 2024 rose to CHF 14.927 million, reflecting a higher fixed salary despite a slight decrease in his bonus. The Group Executive Board's total remuneration increased to CHF 143.5 million, with an average of CHF 9.2 million per member, while the bank's Key Risk Takers received a total of $1.7 billion, averaging $2 million each. UBS noted that its CEO pay remains significantly lower than that of international competitors and other Swiss companies, despite managing a complex integration.
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