00:00What a start to the trading week stateside. Equities open up, gap lower, bond yields higher, dollar weaker.
00:06We've seen this movie before last April, got over it pretty quickly.
00:09We've thrown a lot of this market in the last 12 months. It hasn't stuck.
00:13Is there something different about the way we're set up for 2026?
00:16Well, I would say that it's probably the accumulation of issues that are now out there and not resolved
00:23that is becoming a little bit troubling in my point of view.
00:26So I think that this is the only major change.
00:30But we have to stay tuned for more volatility going forward and predictability and rapid changes.
00:38So I think that staying diversified in financial markets nowadays is pretty important.
00:43Let's get to what that word means, diversify.
00:45It feels like that's a diplomatic way of saying sell America sometimes.
00:48I'm not going to put words in your mouth. I'll tell you what others are saying.
00:51PIMCO is talking about a multi-year period of diversification away from U.S. assets.
00:56We've seen from others moving out of U.S. treasuries.
00:59There was a headline earlier on this morning about a very small Danish pension fund.
01:03And they've got their own issues in Denmark right now, given their relationship with America.
01:07What are you seeing develop?
01:08Well, diversifying away from America is impossible.
01:11I think that in any major asset allocation, one could probably think about having an overweight or underweight, but diversifying away from the U.S.
01:21And also from the dollar is a quite dangerous bet.
01:26You know, things can change rapidly.
01:28And the U.S. is the strongest economy in the world.
01:32The one who has the highest level of innovation right now is a little bit bumpy.
01:36But I would say that I wouldn't really bet against the U.S.
01:40There seems to be a difference between how the politicians and the policymakers talk about America right now and the backdrop for international relations and how a business person thinks of America, the economy and the opportunity.
01:51I've mentioned this stat a number of times already today about the survey that PwC put out.
01:55They surveyed four and a half thousand CEOs and the top destination for capital for investment, America.
02:02And it was up on last year.
02:04As a bank boss right now, a CEO who's thinking about expanding around the world, why is U.S. still top of mind for you?
02:11Well, because from our standpoint of view, we see two big levers.
02:15First of all, wealth creation, GDP growth, innovations and also more idiosyncratic to UBS is that we see potential for us to become more present, increase our market share.
02:29So that's one place.
02:31On the other hand, we are also very big in Asia.
02:34I mean, we manage one trillion of assets there.
02:36We are growing very fast.
02:37The economy is growing.
02:39You know, half of the population in the world is living there and is creating new wealth.
02:44But, you know, in the Americas, in the U.S., by the way, last year, the U.S. created 25 millions of new millionaires.
02:53So basically 1,000 millionaires a day.
02:57So it's a place for a financial institution, a wealth manager like UBS is a place to be.
03:02Let's talk about that.
03:03Is that something you want to do organically or through an acquisition?
03:06I think that we have enough to do organically by doing better what we can do.
03:13We are enhancing our product capabilities.
03:17We just got a national charter application being approved by the OCC.
03:23We are expanding our interaction between the investment bank and our wealth management people.
03:30So I think that's more things we can do to get better and stronger.
03:35It sounds like you're on the front foot at the same time as the bells ring behind me.
03:38I'm reminded of where we are, Switzerland, and the issues on the horizon potentially for the bank.
03:43And that's capital requirements.
03:44Yeah.
03:44That feels like a cloud that's hanging over this bank right now.
03:47How quickly do you think we can resolve it?
03:50Not quickly.
03:51I think it's a political process.
03:52Most likely we're going to find out the direction of travel in the middle of the second quarter.
04:00And then it's still a political process.
04:02But you're right that this is something that has been quite distracting for us.
04:08Although we have been quite successful in managing the integration of Credit Suisse.
04:12It's almost completed.
04:13We are almost, you know, three months to go.
04:17And then the vast majority of the job is done.
04:20But we look forward for a resolution also.
04:24I'm sure you do.
04:24From the strategic standpoint, how is it holding you back?
04:27How is it distracting you?
04:28What are you prevented from doing that you would like to do right now?
04:31At this point in time, to be fair, nothing.
04:33Because, you know, executing the integration is the top priority.
04:37We cannot be complacent.
04:38Although 90%, 85% is done.
04:41The last 15% is as important.
04:45We still need to take out 3 billion of cost and finalize the restructuring.
04:51And then we are prepared for growth.
04:54And that's the reason why we are investing top line.
04:57But also in efficiencies, AI, and how we can become better and stronger.
05:03Where did the cost come out?
05:04Are you satisfied with the size of the workforce?
05:06Does more need to be done on that side of things?
05:08There is still, unfortunately, that's the more, you know, a big chunk of the savings are going to come by disconnecting all the IT systems, data centers.
05:19But also there is, you know, also a painful still part on the account.
05:24But it's within what we are always announced.
05:26So, you know, I think the direction of travel is set.
05:30This is the top of the to-do list for you.
05:33And then someone else is going to step in eventually.
05:35You've offered your thoughts about where that someone might come from, that you'd like to see them come from internally, from within the bank.
05:41Are you open to someone coming from the outside?
05:44Well, we always need to be open.
05:45I think the board is not, you know, my job is to prepare and to present to the board as many candidates possible for internally.
05:56And the role of the board is to also evaluate external candidates and find the best solution for the future.
06:02But I would say the bank is very strong.
06:05My team is very strong.
06:06And I do believe that, you know, an evolution is what we need is probably not a revolution.
06:13But, you know, it all depends.
06:14What's the timeline for that process now?
06:16Can you give us an idea?
06:17At what point do you present your ideas about who might succeed you?
06:21Well, we always, every year, I present ideas and, you know, succession is not a process that you do, you know, only a few months or years before somebody leaves.
06:35Succession is something that we manage every year.
06:38And from Iceland's point of view, we need to be just prepared to have the best person for that moment.
06:45When that person is selected, there is another seat that might open.
06:48And it's the chairperson's seat.
06:50And I just wonder, when you step aside as CEO, has the chapter truly closed for you and the bank?
06:55Well, look, you know, right now I'm very focused on finishing my job.
06:59Honestly, I think this is still very intense activity.
07:03And then it's going to be, you know, I need to reflect.
07:07You realize people watching this won't really believe that?
07:09No.
07:10You are a human being.
07:12You'll be thinking about the future and what comes next.
07:15But people watching, they are not expecting me to respond.
07:18That is true as well.
07:19Particularly this gentleman right here who wants that response from you.
07:22Just a final question from me.
07:24I believe you first took the job as CEO back in 2011.
07:27As you look back on things, and I think this is the appropriate time to begin to think about this, your legacy at the bank.
07:32I'm not sure you ever really thought that we'd end up here integrating Credit Suisse in the circumstances we did.
07:38But how would you like your legacy to be remembered as the leader of UBS?
07:42I was very proud.
07:45I mean, in a tragic moment for Switzerland and for the banking industry, I was very proud in 2023, two years after I left, that UBS was asked to step in and stabilize and help stabilize in Credit Suisse and be part of the solution.
08:00That was for me, you know, almost reaching what I always thought I wanted to show with our transformations in the first period.
08:11Right now, I think that we have a solid bank, a stronger bank than before, and I believe we are set for growth.
08:17So the legacy is always to see that when you leave, after a couple of years, things are going even better.
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