Ermotti Says Talk UBS Threatening to Leave Switzerland ‘Absurd’

(Bloomberg) — UBS Group AG Chief Executive Officer Sergio Ermotti pushed back hard on speculation that the bank is looking to leave Switzerland, saying that the leadership is seeking a compromise on contentious capital rules.

UBS being a Swiss bank “is the best possible outcome and this is what myself and my Chairman Colm Kelleher are working on — the rest is BS,” Ermotti said at JPMorgan Chase & Co.’s European Financials Conference on Thursday. “We never, ever threatened to leave the country. This is absurd.”

The lender’s leadership is trying to convince the Swiss government to water down planned changes to regulation that could impose as much as $26 billion in fresh capital requirements on the bank. The lender has been looking at options with regard to the Swiss capital issue since earlier this year, and has reportedly held talks with US Treasury Secretary Scott Bessent about a potential relocation of headquarters.

Yet Ermotti also underlined that the current capital proposals by the government, which will be formally drafted for parliamentary debate next year, are not acceptable. “They are not going to work for us,” he said. Ermotti declined to detail what mitigating actions the bank could take before the full extent of the law becomes clear, and signaled that the bank is still evaluating all options at its disposal.

Bloomberg reported that the bank was considering moving its headquarters earlier this year.

UBS has recently seen some signs of support from parliamentarians, after an influential committee criticized some of the government’s plans.

At the heart of the reforms is a requirement that UBS would have to fully back all its foreign subsidiaries, including its US wealth management and investment banking operation, with capital at the parent bank.

For the worst-case scenario, options theoretically on the table range from the dramatic — a merger or acquisition deal with a non-Swiss bank allowing a change in domicile and escape from the oncoming rules — to the more mundane, such as a range of technical tweaks that can put just enough capital away over the coming years.

Bloomberg reported in September that UBS leadership is generally less inclined toward radical moves, for now. A vote on the capital reforms isn’t likely before 2027 at the earliest.

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