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Ermotti Says UBS Won’t Shrink to Meet Swiss Capital Rules

(Bloomberg) — UBS Group AG Chief Executive Officer Sergio Ermotti said that he won’t make the bank smaller to mitigate the potential impact of future Swiss capital requirements.

“Having a global diversified business is a strength for us and for Switzerland,” Ermotti said in a Bloomberg TV on Wednesday. “Shrinking is not an option.”

Switzerland last month unveiled proposals to reform its bank capital rules in an effort to make the industry more resilient following the collapse of Credit Suisse in 2023. The government has estimated this could add as much as $26 billion to UBS’s existing capital demands, triggering an effort at the country’s largest lender to offset the expected effect.

Swiss policymakers have focused on the huge size of UBS in relation to the relatively small Swiss economy, even though it is one of the world’s richest nations. Politicians and officials are concerned that the country will not be able to rescue UBS again — as it did after the 2008 financial crisis — given its scale and global complexity.

That’s given rise to a debate over whether UBS could limit its growth — and executives have already offered to keep the size of its investment could be kept at a constant proportion of the balance sheet. Analysts have also raised the possibility that the lender may reduce its US operations.

“I’ve heard theories that we can simply move money, reclassify businesses or sell assets,” Ermotti added in a later press conference. “There are no easy or quick fixes and it’s unrealistic to assume UBS shareholders or clients outside of Switzerland will bear the increased costs on their own.”

UBS’s own estimate of the capital it would need to meet the new regulations — $24 billion — comes on top of the increased requirements it expects following the acquisition of Credit Suisse, making a total of $42 billion.

UBS earlier reported second-quarter earnings that beat expectations on net income.

Given the political pressure, UBS is considering a relocation of its headquarters, Bloomberg has reported. The CEO said Wednesday he wouldn’t speculate about any potential relocation.

The “base case” is that “we can successfully operate out of Switzerland as a global bank,” Ermotti said in the interview. “The decision making bodies that are asked to take this very important decision do it with all the information,” he said.

–With assistance from Jan-Henrik Förster and Noele Illien.

(Updates with further Ermotti comments)

©2025 Bloomberg L.P.

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