UBS boss Ermotti makes clearest Swiss exit threat

Ermotti is unhappy with proposed Swiss regulations Keystone / Georgios Kefalas

UBS CEO Sergio Ermotti issued an unusually clear threat to relocate the Swiss bank as he stepped up his rhetoric over Switzerland’s plans to make it hold billions of dollars in extra capital.

“We are assessing the long term consequences for our ability to compete out of Switzerland,” Ermotti said in response to an analyst question on Wednesday. Clients “appreciate Switzerland like we do – but a passport is not enough nowadays.”

Fresh from a meeting with Swiss lawmakers on Monday, Ermotti sharpened his language attacking a vote last month that dimmed the bank’s hopes of seeing the government’s plans for a $16 billion capital hike watered down.

Ermotti has previously stopped short of making a direct threat to leave the country, but the increasing likelihood of defeat has raised the stakes for the ongoing debate.

“We are once more in a critical juncture where the course for the coming decades will be set for the Swiss financial centre,” he said, while stressing that no decisions need to be taken urgently.

Since the collapse of Credit Suisse more than three years ago, the Swiss government has been seeking ways to make its lone remaining global bank crisis-proof. A key plank of its reform agenda is the increase in equity capital requirements, intended to make sure that UBS’s foreign businesses can’t sink its domestic entity. UBS says the reform will make it uncompetitive.

Swiss DNA

Ermotti cast doubt on the idea that being a bank in Switzerland – a centre of discretion and wealth management for centuries – is decisive for UBS’s business model.

“Being a bank that has a DNA of Swissness, that is rooted in Switzerland, is a big advantage, but it is not the reason why our clients are banking with us.”

Yet the prospect of a UBS departure has raised fears of the impact on the domestic economy, as well as warnings over the cost for the bank of actually pulling off such a move.

The Swiss Bank Employees Association wrote to lawmakers earlier this month urging a “viable compromise” to avoid losing as many as 12,000 jobs if the bank relocates its headquarters. Such a prospect may give the bank leverage as it enters the next round of parliamentary debate.

The Senate is now taking the legislative baton from the House of Representatives and will discuss the matter extensively next month. The more left-leaning chamber is, however, potentially even less likely to be sympathetic to UBS’s position than the other chamber.

The Senate’s Economic Affairs and Taxation Committee said on Wednesday that it’s “uncontested” that the capital backing of foreign units needs to be strengthened.

Costly to leave

Finance Minister Karin Keller-Sutter, who has driven the capital plan so far, said last month that it would be far more expensive and legally complex for UBS to leave than to absorb the new requirements.

“Its business model, however, is based on Switzerland, on Swissness, on the rule of law, and on political stability,” newspaper Schweiz am Wochenende cited her as saying in September.

UBS has vowed to continue to press its case in the interests of its investors.

“September’s outcome in the upper house is very concerning,” Ermotti said Wednesday. “Just as troubling is the failure to consider the consequences for our shareholders who remain the first line of defense in period of stress and whose critical financial support during the acquisition helped protect Switzerland’s reputation and financial stability.”

On Monday, Ermotti, accompanied by UBS vice-chair Markus Ronner, spoke to the parliamentary Economic Affairs and Taxation Committee at a closed-door hearing in a sign of continuing efforts to persuade lawmakers to water down the legislation.

Shareholder pressure

The capital debate is headed for what’s potentially a final vote as soon as December, meaning the clock is ticking on UBS’s effort to turn the tide in its favor. It’s also possible that no resolution is reached before next year.

Ermotti also reminded investors on Wednesday that he’d rather pay out profits to them than use it to meet regulators’ demands. The executive said that the bank had, when dividends were also taken into account, re-attained the level of investor returns that it was at before it bought Credit Suisse in 2023.

UBS is due to wrap up a current $3 billion share buyback program early next year and will update on its plans for a subsequent round in February, along with a regular refresh of targets and strategy.

Two major shareholders have actively urged the board to look abroad. Earlier this month, US asset manager Artisan Partners said that Switzerland is no longer an attractive or desirable location for the banking giant – echoing comments from Cevian.

Reports of serious contingency planning have emerged. News outlet Semafor reported last month that UBS has revived discussions about ways to leave, including through a deal with a foreign lender, and the tabloid Blick subsequently reported several international banks have signaled interest.

Some inside UBS see a combination with Morgan Stanley or another large US bank as a potentially appealing option to relocate, people familiar with the matter have told Bloomberg. There’s no indication any party is currently pursuing a transaction.

(Updates with further comments)

©2026 Bloomberg L.P.

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