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UBS has confirmed its share buyback plans for 2025, totaling $3 billion, with $1 billion targeted for the first half and up to $2 billion for the second half, contingent on capital requirement stability. CEO Sergio Ermotti noted that clarity on potential capital tightening from the Swiss Ministry of Finance is expected in May, though the outcome remains uncertain.
Switzerland's financial regulator, Finma, is open to gradually increasing capital requirements for UBS Group AG, potentially delaying the impact of reforms the bank opposes. CEO Stefan Walter emphasized the need for robust capital backing for foreign units, which could raise UBS's requirements by $25 billion, while UBS executives warn this could harm competitiveness. The proposed legislation will be presented to Swiss lawmakers by May, with implementation not expected until 2028, allowing UBS time to build capital without significantly affecting shareholder distributions.
Sergio P. Ermotti serves as the CEO of UBS AG and holds various leadership roles, including Chairman of Investindustrial Acquisition Corp. and Swiss Re AG. His extensive experience includes previous positions at UBS Group AG, UniCredit SpA, and Merrill Lynch, among others, showcasing his influence in the financial sector. Additionally, he is involved with several foundations and organizations, emphasizing his commitment to global banking and economic development.
UBS CEO Sergio Ermotti earned 14.9 million Swiss francs in 2024, including a fixed salary of 2.8 million and bonuses of 12.1 million. His remuneration, a 4% increase from the previous year, has sparked criticism and debate over high bonuses in Switzerland, especially as it remains lower than some German CEOs. A parliamentary proposal to cap bankers' salaries at 3 to 5 million Swiss francs could significantly impact UBS if approved.
UBS plans to proceed with share buybacks, potentially acquiring up to $2 billion in its own securities in the second half of the year, contingent on stable Swiss capital requirements. The Swiss Ministry of Finance will present key figures for potential capital tightening in May, leading to a lengthy consultation and decision-making process involving parliament and possibly the electorate. Ermotti noted that while clarity may not be immediate, uncertainty is expected to decrease.
Thomas Matter, a National Councillor from the SVP, opposes allowing FINMA to impose fines, arguing that past fines did not prevent Credit Suisse's downfall and may have weakened the bank. He emphasizes that FINMA's role should focus on effective supervision rather than regulation. Despite criticism regarding financial ties to UBS, Matter maintains that political donations are a part of Switzerland's militia parliament system.
Two years after UBS's acquisition of Credit Suisse, tensions have escalated between the bank and the Swiss Confederation. UBS CEO Sergio Ermotti and Finance Minister Karin Keller-Sutter have publicly clashed over proposed banking regulations, highlighting a significant shift from their previously cooperative relationship during the takeover.
The debate over UBS's role in the Swiss economy intensifies, with some economists arguing it is not irreplaceable, while others emphasize its significance for local businesses. The Federal Council's recent actions have raised concerns about increased dependence on UBS, which some view as a geopolitical risk. Meanwhile, foreign banks are expanding their presence, sensing an opportunity as UBS faces stricter capital requirements and potential relocation discussions.
Roger Nordmann delivered an emotional farewell speech to the National Council, emphasizing the need for stronger capital requirements for systemic banks like UBS to prevent future crises. He warned of moral hazard, noting that UBS's reliance on state support could jeopardize the economy. The CEP has proposed several measures to enhance bank supervision, but opposition from the Swiss Bankers Association and UBS's CEO remains a challenge.
The Swiss National Council is set to decide on a proposed salary cap for bank executives, primarily targeting UBS's CEO Sergio Ermotti, whose salary for 2024 is CHF 14.9 million. While public frustration over high salaries grows, the focus should shift to enhancing capital requirements for banks, especially following the Credit Suisse collapse, which highlighted the need for stronger equity buffers. UBS faces potential additional capital requirements of up to $25 billion, yet the Federal Council's reluctance to enforce stricter regulations risks undermining the stability of Switzerland's banking sector.
Sergio Ermotti
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