UBS Could Slow Investments on Iran War Uncertainty, Ermotti Says

(Bloomberg) — UBS Group AG Chief Executive Officer Sergio Ermotti said the Iran war could force him to pare back spending, although it won’t fundamentally alter the bank’s overall strategy.

While Ermotti answered “no” when asked in a Bloomberg TV interview in Beijing if the uncertainty created by the conflict will impact UBS’s expansion plans, he also said that “we may tactically have to slow down certain investments.” He didn’t specify what that could entail.

Global markets have been roiled by the Iran war, which has entered its fourth week. Rhetoric escalated during the weekend as President Donald Trump issued an ultimatum to Tehran to reopen the Strait of Hormuz — crucial for the flow of oil and gas from the Middle East. The Islamic Republic responded that any such attack would prompt it to shut the waterway indefinitely and target US and Israeli energy infrastructure across the region.

A selloff in stocks, gold and bonds deepened on Monday.

Ermotti said in the interview that energy prices are likely to remain elevated as investors digest the impact of the Middle East conflict. He doesn’t yet see “any major shift in asset allocation” as result but said that “this pressure on the economy will start to weigh” on markets.

UBS will continue to invest in “capabilities, in artificial intelligence to make our processes more efficient,” Ermotti also said. “We don’t really run the business on a stop-and-go” basis.

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