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UBS is facing pressure from Swiss regulators to increase capital reserves, prompting discussions about potentially relocating its headquarters. While the bank emphasizes its commitment to remaining in Switzerland, experts suggest that alternatives like Singapore are limited, and a move may not be financially viable for 10 to 15 years. The ongoing uncertainty is impacting UBS's share price, which has underperformed compared to its peers.
UBS has secured approval to increase its stake in UBS Securities in China from 67% to 100% by acquiring the 33% held by Beijing State-owned Assets Management. This strategic move follows the takeover of Credit Suisse and aims to streamline its operations in China, where foreign banks are restricted from holding multiple licenses. Despite this development, UBS shares fell by 0.92% on the Swiss stock exchange.
UBS has acquired full control of UBS Securities in China by increasing its stake from 67% to 100%, purchasing the 33% share from the Beijing State-owned Assets Management. This strategic move follows the bank's takeover of Credit Suisse and aims to streamline its operations in China, where foreign banks are restricted from holding multiple securities licenses. UBS, which first entered the Chinese market in 2007, has progressively increased its ownership since gaining majority control in 2018.
UBS has secured approval for a complete takeover of UBS Securities in China, acquiring an additional 33% stake from Beijing State-owned Assets Management Co., Ltd. This move marks a significant milestone, allowing UBS to enhance its investment banking and wealth management services in one of the world's fastest-growing markets. Group CEO Sergio Ermotti emphasized the bank's commitment to further investment in China as a key element of its growth strategy.
The Swiss Shareholders' Association Ethos is urging UBS shareholders to oppose the bank's executive pay, share buyback program, and sustainability report ahead of the April 10 Annual General Meeting. Ethos criticizes excessive executive compensation, the planned share buybacks amid calls for stronger capital requirements, and the dilution of sustainability commitments, highlighting gaps in emissions data disclosure.
UBS faces shareholder backlash as the Ethos association recommends rejecting the bank's remuneration, share buyback program, and sustainability report at the upcoming AGM. Ethos criticizes the high executive pay and potential for excessive risk-taking, while also highlighting gaps in UBS's sustainability commitments. The bank's management compensation for 2024 is said to reflect a performance-based approach, despite concerns over its alignment with current capital requirements.
Ethos, a foundation advocating for good corporate governance, urges UBS to prioritize replenishing its equity over high executive compensation and share buybacks. At the upcoming general meeting, it proposes rejecting the remuneration and sustainability report, citing excessive pay compared to peers and concerns over risk-taking behavior. Ethos emphasizes the need for a robust equity base to ensure long-term stability, criticizing UBS's recent sustainability efforts and lack of transparency in its climate strategy.
UBS is contemplating relocating its headquarters amid potential capital requirement increases of up to $40 billion, which could hinder its global competitiveness. CEO Sergio Ermotti emphasized that excessive regulations could penalize the bank's diversified operations and impact Switzerland's economy. The bank's commitment to a Swiss identity remains, but it faces challenges balancing local regulations with its international business strategy.
UBS Group AG faces criticism from the proxy adviser Ethos for diluting its sustainability policies, particularly regarding diversity, equity, and inclusion (DEI), as its recent reports omit DEI references entirely. Ethos highlighted the reputational risks of such a retreat, especially amid a politically charged environment where DEI initiatives are often disparaged. Additionally, concerns were raised about executive pay and UBS's plans for share buybacks, urging a focus on strengthening its capital base instead.
Ethos criticizes UBS for its high executive compensation, which it argues encourages excessive risk-taking, and advocates for replenishing equity instead of share buybacks. The foundation also highlights shortcomings in UBS's sustainability efforts, particularly regarding transparency and climate goals, urging a focus on long-term stability over short-term gains.
Sergio Ermotti
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