Chapter 1: What insights does Sergio Ermotti share about current market volatility?
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Let's get out to Davos where Bloomberg surveillance anchor John Farrow is standing by. John, take it away. Hey, guys. Live from Davos, Switzerland, at the World Economic Forum, standing by the king of Swiss banking. He might not like that introduction. It's Sergio Aramotti, the UBS CEO. Sergio, good to see you. Hi. Thanks for braving the cold. I appreciate it.
Before we get into the bank, we're going to ease into this and start with financial markets. We're going to start to the trading week stateside. Equities open up, gap lower, bond yields higher, dollar weaker.
we've seen this movie before last april got over it pretty quickly we've thrown a lot of this market in the last 12 months it hasn't stuck is there something different about the way we're set up for 2026 well i would say that it's probably the accumulation of issues that are now out there and not resolved that is becoming a little bit troubling in my point of view so i think that this is the only major change but we have to stay tuned for more volatility going forward and predictability
and rapid changes. So I think that staying diversified in financial markets nowadays is pretty important.
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Chapter 2: How does UBS CEO Sergio Ermotti define diversification in investing?
So I think that's... more things we can do to get better and stronger.
It sounds like you're on the front foot at the same time as the bells ring behind me. I'm reminded of where we are, Switzerland, and the issues on the horizon potentially for the bank, and that's capital requirements. That feels like a cloud that's hanging over this bank right now. How quickly do you think we can resolve it?
Not quickly. I think it's a political process. Most likely, we're going to find out the direction of travel, you know, in the middle of the second quarter. And then it's still a political process. But you're right that this is something that has been quite distracting for us, although we have been quite successful in managing the integration of Credit Suisse. It's almost completed.
We are almost, you know... three months to go and then the vast majority of the job is done. But we look forward for a resolution also.
I'm sure you do. From the strategic standpoint, how is it holding you back? How is it distracting you? What are you prevented from doing that you would like to do right now?
At this point in time, to be fair, nothing because, you know, executing the integration is the top priority. We cannot be complacent, although 90, 85% is done. The last 15% is as important. We still need to take out 3 billion of cost and finalize the restructuring. And then we can...
We are prepared for growth, and that's the reason why we are investing top line, but also in efficiencies, AI, and how we can become better and stronger.
Where do the costs come out? Are you satisfied with the size of the workforce? Does more need to be done on that side of things?
There is still, unfortunately, a big chunk of the savings are going to come by disconnecting all the IT systems, data centers, but also there is a painful part on the account, but it's within what we always announced. So I think the direction of travel is set.
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