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Goldman Sachs has lowered its price target for UBS AG from CHF44.50 to CHF36.00 while maintaining a Buy rating, indicating a potential upside of about 22%. This adjustment reflects a reassessment of capital requirements and earnings forecasts, anticipating an 8% EPS decline in 2025 due to lower revenue expectations. Meanwhile, UBS is implementing workforce reductions post-Credit Suisse acquisition and has made strategic hires to enhance operational flexibility.
UBS has been ordered to pay a fine of 172.4 million euros after the EU court upheld penalties for its involvement in a bond cartel. The court also slightly reduced fines for UniCredit and Nomura, while other banks involved were not penalized. UBS is considering an appeal against the ruling, which highlights ongoing scrutiny of banking practices amid potential market turbulence.
Goldman Sachs has reduced its price target for UBS AG from CHF 44.50 to CHF 36.00 while maintaining a Buy recommendation, indicating a potential upside of about 22%. This adjustment reflects a reassessment of UBS's capital requirements and a forecasted decline in earnings per share by approximately 8% in 2025. Meanwhile, UBS is implementing strategic changes, including cost-saving measures and leadership appointments, amidst varying analyst ratings and price targets from other financial institutions.
Ethos, a shareholders' association, is urging UBS shareholders to reject the bank's remuneration report, share buyback program, and sustainability report ahead of the Annual General Meeting. They criticize the high compensation of management, particularly the variable remuneration structure, which could promote excessive risk-taking. Additionally, Ethos highlights significant gaps in UBS's sustainability commitments and opposes the planned share buybacks, advocating for stronger capital resources in light of recent banking crises.
Ethos has criticized UBS for its high management compensation, particularly highlighting that the CEO's salary remains among the highest in Switzerland and Europe, despite no increase for 2024. The organization also opposes the bank's planned share buyback program, arguing it contradicts the need for stronger capital requirements post-Credit Suisse's collapse. Additionally, Ethos points out significant gaps in UBS's sustainability commitments, including a reduction in climate change ambitions and incomplete reporting on greenhouse gas emissions related to loans.
The Ethos Foundation plans to oppose UBS's executive remuneration and share buybacks at the bank's Annual General Meeting on April 10, 2025. Ethos criticizes the high salaries of UBS executives, particularly CEO Sergio Ermotti, whose pay is significantly above the median for similar companies. The foundation also warns that increasing variable compensation could lead to excessive risk-taking, echoing concerns from past financial crises, and advocates for strengthening equity capital instead.
Markus Ronner, UBS's Group Chief Compliance and Governance Officer, is set to make a rare television appearance on Swiss Arena, facing left-wing critics including Cédric Wermuth and Franziska Ryser. Known for his calm demeanor and extensive knowledge of banking regulations, Ronner's participation marks a significant moment, as top bank executives have largely avoided public scrutiny since the financial crisis. His background in compliance and governance positions him well to address the challenges posed by critics.
UBS faces a potential $25 billion capital requirement increase due to Swiss regulatory changes aimed at addressing "equity double leverage" issues highlighted by the Credit Suisse crisis. To mitigate shareholder impact, UBS is considering options such as capping its investment bank and possibly relocating its headquarters, though it remains committed to Switzerland. Swiss lawmakers are expected to propose new capital rules in June, but final decisions may take years.
UBS is proposing legal restrictions on its investment banking segment and plans to raise $5 billion in capital following the Credit Suisse merger to address regulatory challenges. The bank faces legal issues, including a confirmed EU fine of €172.4 million for antitrust violations, while considering relocating its headquarters amid stricter capital requirements. These developments highlight UBS's efforts to comply with regulations and maintain its market position.
UBS is open to compromise on capital requirements, proposing to limit risky investment banking to 30% of its business and potentially adding $5 billion in equity, though less than regulators demand. The bank faces a €172 million fine for participating in a bond trading cartel, which it may appeal. Additionally, UBS experienced a technical disruption affecting client payment transactions, with double debits reported, but the issue has been identified and will be corrected.
Sergio Ermotti
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