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Tag: UBS Group AG

  • CNBC Daily Open: Strong earnings, macro conditions propelling stocks up

    CNBC Daily Open: Strong earnings, macro conditions propelling stocks up

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    The Morgan Stanley headquarters in New York, US, on Wednesday, Dec. 27, 2023.

    Angus Mordant | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets rise on upbeat earnings
    U.S. stocks     resumed their advance Wednesday, as Morgan Stanley and United Airlines earnings topped estimates. Asia-Pacific markets traded mixed Thursday. The CSI 300 real estate index fell nearly 7% even as Beijing announced new measures to support the industry.

    Follow Decision Time for the ECB live
    Market watchers are expecting the European Central Bank to cut rates by 25 basis points at its meeting later today. If that projection pans out, it’d be the third time the ECB’s cutting rates this year. Catch today’s action on Decision Time, CNBC’s live show analyzing the decision, starting 1 p.m. BST.

    New support measures for real estate
    China’s housing ministry said Thursday it’ll broaden its “whitelist” initiative to all commercial housing projects, which aims to complete the construction of unfinished homes. The ministry also announced that bank loans to developers will be speeded up and nearly double to 4 million trillion yuan by the end of 2024, from the 2.23 trillion yuan already approved.

    Potential probe of Intel
    Intel is potentially facing a security review by the Cybersecurity Association of China. Officials allege that Intel’s CPU chips possess vulnerabilities in security management and flaws in product quality. CSAC also accused Intel of using remote management features to surveil users.

    [PRO] A shining sector that’s not tech nor utilities
    Big Tech stocks, fueled by excitement over generative artificial intelligence, have been responsible for most of this year’s rally in the market. Gen AI is powered by energy-hungry data centers, which benefits the utilities sector. But there’s a new group of stocks that’s fast becoming one of the best-performing sectors for the year.

    The bottom line

    The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.

    “Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.

    After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.

    The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.

    Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.

    Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.

    The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.

    Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.

    “We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”

    With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.

    – CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.    

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  • CNBC Daily Open: Strong earnings, macro conditions driving stocks higher

    CNBC Daily Open: Strong earnings, macro conditions driving stocks higher

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    The Morgan Stanley headquarters in New York, US, on Monday, Oct. 14, 2024. 

    Michael Nagle | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    The bottom line

    The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.

    “Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.

    After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.

    The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.

    Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.

    Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.

    The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.

    Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.

    “We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”

    With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.

    – CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.    

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  • CNBC Daily Open: Moving past sticky core inflation

    CNBC Daily Open: Moving past sticky core inflation

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    Prices are displayed in a store window in Brooklyn on August 14, 2024 in New York City. 

    Spencer Platt | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Stubborn core inflation
    Prices in the U.S. rose 0.2% in August, the Bureau of Labor Statistics reported, in line with the Dow Jones consensus. The 12-month inflation rate was at 2.5%, the lowest since February 2021. However, core CPI, which excludes food and energy prices, ticked up 0.3%, 10 basis points higher than expected.

    Rebound rally
    Major U.S. indexes closed higher in a choppy session on Wednesday, lifted by technology stocks. Asia-Pacific markets were trading higher on Thursday. Japan’s Nikkei 225 jumped 3.43% and the Taiwan Weighted Index rose 3%. Chip-related Asian stocks including Tokyo Electron, Advantest and TSMC rose, tracking the rally in U.S. technology stocks.

    UBS CEO sees soft landing
    Sergio Ermotti, Group CEO of UBS Group AG, told CNBC that investors expecting the Fed to cut rates aggressively are getting “ahead of the curve.” Sticky inflation remains the “most important” issue, he added – August’s core CPI surprised to the upside. However, Ermotti still sees “the outlook [as] pretty consistent with a soft landing.”

    Harris or Trump? Little difference for China
    Regardless of who wins the U.S. Presidential elections, the country’s trade ties with China will remain tense, said Carlos Casanova, senior economist at Swiss private bank UBP. Donald Trump has proposed tariffs of up to 100%, while Kamala Harris is expected to stick with Joe Biden’s tariff policy that not only retained Trump-era tariffs but also escalated them.

    [PRO] Opportunities for semiconductor stocks
    Semiconductor stocks have been the market’s darling this year and are responsible for pushing the S&P 500 to consecutive fresh highs. However, since July, they’ve had wild swings. Still, with some chip stocks being undervalued, they appear to be good buys amid this volatility, said analysts.

    The bottom line

    On the surface, Wednesday looked like a great day for investors.

    The S&P 500 climbed 1.07%, the Dow Jones Industrial Average added 0.31% and the Nasdaq Composite shot up 2.17%.

    However, those numbers are hiding turmoil under their pretty facades.

    The S&P dropped around 1% during trading but eventually managed to claw back losses and close more than 1% higher by the end of the day. It’s the first time the broad-based index has done so since October 2022.

    The consumer price index for August precipitated the initial fall. Core inflation, to which the Fed pays more attention because it more accurately reflects price movements, came in a bit higher than expected for the month.

    Core inflation was higher than the headline number because food and energy prices are stripped out from the former. And both were mild for the month: Food prices were only 0.1% higher, suggesting no pets need to be eaten, while energy costs fell 0.8%.

    Still, that data means the Fed’s unlikely to make a jumbo-sized 50-basis-point cut. Disappointment translated into stocks dropping.

    Even with inflation remaining difficult to tame, it doesn’t mean consumers are worse off. Real earnings rose 0.2% for the month, showed a separate Bureau of Labor Statistics report, which means the rise in income outstripped price increases.

    That might have helped the intraday rebound in the S&P.

    As for the Nasdaq, it was buoyed by technology stocks, which experienced a huge bounce from the previous days’ falls. Nvidia popped 8%, probably on news the U.S. might let the chipmaker sell advanced chips to Saudi Arabia, according to Reuters.

    But there might be more choppiness ahead in markets. The U.S. government is, once again, close to a shutdown because of politicking over government funding. It’s almost like the U.S. House of Representatives has no concept of a plan.  

    – CNBC’s Jeff Cox, Pia Singh and Lisa Kailai Han contributed to this story.

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  • UBS loves this high-flying sector that’s up 10% in the quarter. Here’s how to play it

    UBS loves this high-flying sector that’s up 10% in the quarter. Here’s how to play it

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  • UBS veteran boss Ermotti may have pulled off the deal of the decade with the Credit Suisse rescue

    UBS veteran boss Ermotti may have pulled off the deal of the decade with the Credit Suisse rescue

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    UBS CEO Sergio Ermotti on Tuesday, May 7, 2024. 

    Bloomberg | Bloomberg | Getty Images

    After an intense weekend of negotiations in March 2023, Swiss banking giant UBS agreed to buy its embattled rival Credit Suisse.

    Despite the attractive purchase price of $3.2 billion, investors were concerned about whether UBS would manage to turn around Credit Suisse’s investment banking business — an old source of problems. UBS had also become one the biggest banks in Europe, raising political and regulatory fears.

    At the time, investors were “very concerned” about the complexity of the deal and whether UBS would make it work, Bruno Verstraete, founder of Lakefield Wealth Management, told CNBC by email.

    “When a healthy individual is sleeping next to someone with a severe flu, they are likely to contract it as well,” he said.

    The acquisition was so complex that UBS decided to change leadership and bring back former CEO Sergio Ermotti to the bank’s helm to oversee the merger.

    “Given the market conditions, political dynamics, and time constraints under which the deal was executed, investors were acutely aware of the significant risks associated with acquiring unknown liabilities,” Verstraete added.

    Now, 18 months later, that sentiment is changing, and many agree this is the deal of the decade.

    “The merger with Credit Suisse currently goes along the planned milestones and timelines, and the UBS leadership under CEO Sergio Ermotti has been absolutely right to push ahead ambitiously,” Beat Wittmann, chairman at Porta Advisors, told CNBC by email.

    Stock Chart IconStock chart icon

    UBS

    UBS concluded the merger of the parent companies in May, then finalized the transition to a single U.S. intermediate holding in June. In July, it fully merged the Swiss entities of Credit Suisse and UBS. The entire process is expected to wrap up in 2026.

    “The integration process is being conducted in a typically Swiss manner — disciplined, pragmatic, and seemingly on track. Calm and trust have been restored,” Verstraete said.

    The dissipating concerns were also clear when UBS reported second-quarter results in August, with analysts changing tack to focus on the actual business performance, rather than on the details of the merger.

    UBS‘ announcement of faster progress on cost savings also pleased investors. The bank now expects to reach $7 billion in cost savings in 2024, or more than half of UBS’ $13 billion target for the whole duration of the merger process by 2026. The figures compare with a 2022 baseline.

    ‘A lot of work ahead of us’

    But Ermotti is not putting his feet up.

    “Let me reiterate something you have heard me say before. We still have a lot of work ahead of us to address Credit Suisse’s structural lack of sustainable profitability,” he said in August following the results.

    “While we are encouraged by the significant progress we have made across the group, the path to restoring profitability to the pre-acquisition levels won’t be linear,” Ermotti added.

    One of the big overhangs is potential new capital requirements from Swiss authorities.

    Swiss Finance Minister Karin Keller-Sutter told the country’s Tages-Anzeiger newspaper earlier this year that it is “plausible” UBS will require a further $15 to $25 billion in capital to deal with national anxieties that the bank has become too big to be saved.

    Clarity on these capital additions is expected to emerge in early 2025.

    As such, some investors still need a little bit more convincing.

    “The key indicator to watch for UBS fortunes is the share price, and the capital market displays a simple and clear ‘show me first’ attitude,” Porta Advisors’ Wittmann said.

    UBS shares rallied in the wake of the deal in March 2023, but have steadied somewhat since. They are up over 21% over the last 12 months, but only 1% over the year to date.

    While the bank’s future remains uncertain, some are celebrating the developments so far.

    “This transaction could be recorded in history as one of the most successful deals ever made,” Verstraete said, adding that “Mr. Ermotti stands poised to become a national hero, though whether this acclaim will come from Swiss citizens, employees, FINMA [Swiss Financial Market Supervisory Authority], or shareholders remains to be seen.”

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  • UBS posts $1.14 billion profit in second quarter, smashing expectations

    UBS posts $1.14 billion profit in second quarter, smashing expectations

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    General view of the UBS building in Manhattan, New York City, on June 5, 2023.

    Eduardo Munoz Alvarez | View Press | Corbis News | Getty Images

    Swiss banking giant UBS on Wednesday smashed net profit expectations for the second quarter, as revenue swelled at its global wealth management and investment bank units.

    Net profit attributable to shareholders came in at $1.136 billion for the period, versus a company-compiled consensus forecast of $528 million.

    Profit was nonetheless lower than the $1.755 reported in the first quarter, as expected by analysts.

    Group revenue also beat forecasts in the second quarter, coming in at $11.904 billion versus an LSEG-compiled poll of $11.522 billion.

    In the bank’s global wealth management unit, revenue increased by 15% to $6.053 billion, which UBS said was largely due to the consolidation of Credit Suisse. Revenue in the investment bank unit leapt 38% to $2.803 billion.

    In its outlook, UBS said the macroeconomic outlook “continues to be clouded by ongoing conflicts, other geopolitical tensions and the upcoming US elections.”

    It added: “We expect these uncertainties to persist for the foreseeable future, and they will likely lead to higher market volatility compared with the first half of the year.”

    UBS had swung back to profit in the first quarter after two quarterly losses, but it warned that its net interest income would fall in both its global wealth management and its personal and corporate banking divisions.

    It has now been over a year since UBS formally took over Credit Suisse, triggering a huge integration process and creating a wealth management juggernaut. UBS said at the start of July the merger process had completed and that Credit Suisse — the Swiss bank which spectacularly collapsed in March 2023 after years of financial scandals — no longer existed as a separate entity.

    This is a breaking news story and will be updated shortly.

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  • Younger generations of Asians are spending big on art

    Younger generations of Asians are spending big on art

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    Younger, wealthy shoppers in Asia are splashing their cash on art, according to a longtime collector and senior auction house executive.

    Nicolas Chow, Sotheby’s chairman for Asia, said more than 40% of its buyers of contemporary art are millennials (born between 1981 and 1996), while Gen X (1965 to 1980) are also likely to be big spenders, he said.

    “The buyers are increasingly younger. What we’ve seen actually in 2023 … Gen X is the most important buy-base actually — over a million dollars, they dominate the market,” Chow told CNBC’s “Art of Appreciation.”

    Gen Z — the youngest age group for buyers — is “coming in quite strongly,” he said, adding that he recently saw a 20-year-old buyer acquire a piece in Shanghai to celebrate his graduation.

    Wealthy millennials in Asia spent a median of $59,785 on art and antiques during the first half of 2023, while for Gen Zers the figure was $56,000, according to the Art Basel & UBS Survey of Global Collecting 2023.

    Buying at auction — instead of from a dealer, for example — is popular with millennials and Gen X collectors globally, according to the survey. The trend appears to be playing out in Asia. At Christie’s Hong Kong spring season auction, held between May 25 and June 1, around a quarter of buyers were new to the auction house, and 43% of those were millennials, according to an online release.

    A visitor takes a selfie with work by Yoshitomo Nara during Sotheby’s Hong Kong spring sales on April 2, 2024.

    Chen Yongnuo | China News Service | Getty Images

    And, while the size of the global art market fell 4% last year to around $65 billion, according to the Art Basel & UBS Art Market Report 2024, sales in China rose by 9% in 2023, overtaking the U.K. as the world’s second-largest art market. “Activity surged as post-lockdown buyers snapped up backlogged auction inventories and as Hong Kong’s major fairs and exhibitions returned to full-scale programming,” wrote report author and founder of Arts Economics, Clare McAndrew.

    For Sotheby’s, the rise in younger buyers is driven in part by an increase in online activity. “During the pandemic, we really sort of developed our digital abilities with live streaming … And this has really brought in art to the greater communities and allowed us to engage with our buyers across the world,” Chow said.

    Younger collectors are keen on newer art forms, with Gen Z collectors having the highest average expenditure on digital art globally — as well as prints — of any generation, according to the Survey of Global Collecting 2023.

    Young digital artists

    For Angelle Siyang-Le, director of the Art Basel fair in Hong Kong, artists who work in digital media are becoming more prominent. “The definition of digital art nowadays has been expanded from simply photography to video art to NFTs to AI-generated art,” she told CNBC’s “Art of Appreciation.”

    An NFT, or non-fungible token, is a unique digital asset stored on the blockchain. Sales of art-related NFTs were $1.2 billion in 2023, less than half the $2.9 billion peak in 2021 — though still significantly higher than 2020 sales, which were $20 million, according to the Art Market Report 2024.

    “With the younger generations becoming more and more prominent in the market … digital artists … will be the group of artists getting more attention,” Siyang-Le added.

    Hong Kong-based artist Mak2 uses a variety of mediums in her work, including Instagram videos. Her 2017 work, “You Better Watch Out,” an inflatable, transparent “snow globe,” featured floating QR codes that the audience could scan. CCTV cameras filmed people scanning the codes, which linked to a web page that showed the audience looking at the artwork.

    “So you are watching yourself being watched,” Mak2 told CNBC’s Art of Appreciation. “You’re not just looking at your phone, you’re becom[ing] data circulat[ing] inside the app and being recorded and analyzed,” she added.

    People view work at Art Basel Hong Kong, held in March 2024. An installation by artist Mak2, “Copy of Copy of Copy of Copy,” is just seen at the center.

    China News Service | Li Zhihua | Getty Images

    Mak2 exhibited at Art Basel Hong Kong in March, with an installation named “Copy of Copy of Copy of Copy,” based on video game The Sims and painted by artists she commissioned via an e-commerce site.

    Over the past 10 years, Sotheby’s has “opened up” more to contemporary and modern art, Chow said. “Fifty years ago when we came to Asia … we brought Chinese art … And today, we sort of really opened the market to all sorts of new experiences and new material, from dinosaurs to cars to contemporary art, from all around the world. NFTs, sneakers, you name it,” he said.

    Hong Kong’s Art Gallery Association recorded a 27% increase in member galleries between 2021 and 2023, while the Hong Kong Palace Museum opened in 2022, and the M+ last year — both contemporary museums that foster a “greater interest” in the art community in Asia, Chow said.

    Sotheby’s has been holding auctions Asia since 1973 and will open a flagship “maison” in Hong Kong in July, which will sell pieces for immediate purchase as well as holding regular auctions. “At our our maison, we’ll be bringing material from across the spectrum of what Sotheby’s has to offer, from the remote prehistory all the way to the digital future,” Chow said.

    — CNBC’s Quek Jie Ann contributed to this report.

    Watch The Art of Appreciation on CNBC International

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  • Investors may be looking at commercial real estate risk all wrong and missing these opportunities

    Investors may be looking at commercial real estate risk all wrong and missing these opportunities

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  • Credit Suisse bondholders sue Switzerland in the U.S. over $17 billion writedown of AT1 debt

    Credit Suisse bondholders sue Switzerland in the U.S. over $17 billion writedown of AT1 debt

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    The Credit Suisse Group AG headquarters in Zurich, Switzerland, on Thursday, Aug. 31, 2023.

    Bloomberg | Bloomberg | Getty Images

    A group of Credit Suisse bondholders filed a lawsuit against the Swiss government, seeking full compensation over the contentious decision to write down the failed bank’s Additional Tier 1 (AT1) debt.

    As part of Credit Suisse’s emergency sale to UBS last year, which was orchestrated by the Swiss government, Swiss regulator Finma wiped out roughly $17 billion of the bank’s AT1s, writing them down to to zero.

    The bank’s common shareholders received payouts when the sale was completed.

    The move angered bondholders and was seen to have upended the usual European hierarchy of restitution in the event of a bank failure under the post-financial crisis Basel III framework, which typically places AT1 bondholders above stock investors.

    Law firm Quinn Emanuel Urquhart & Sullivan, which represents the plaintiffs, said Thursday that it had filed a lawsuit in the U.S. District Court for the Southern District of New York. It described Switzerland’s decision to write down the plaintiffs’ AT1 value to zero as “an unlawful encroachment on the property rights of the AT1 Bondholders.”

    A spokesperson for the Swiss Finance Ministry declined to comment.

    Finma previously defended its decision to instruct Credit Suisse to write down its AT1 bonds in March last year as a “viability event.”

    “Through its actions, Switzerland needlessly wiped out $17 billion in AT1 instruments, unjustly violating the property rights of the holders of those instruments,” Dennis Hranitzky, partner and head of Quinn Emanuel’s Sovereign Litigation practice, said in a statement.

    The face value of the AT1 bonds held by the plaintiffs in the suit was over $82 million, Reuters reported, citing the filing.

    This photograph taken on March 24, 2023 in Geneva, shows a sign of Credit Suisse bank.

    Fabrice Coffrini | AFP | Getty Images

    AT1s are bank bonds that are considered a relatively risky form of junior debt. They date back to the aftermath of the 2008 global financial crisis, when regulators tried to shift risk away from taxpayers and increase the capital held by financial institutions to protect them against future crises.

    One of the key attributes of AT1 bonds is that they are designed to absorb losses. This happens automatically when the capital ratio falls below the previously agreed threshold, and AT1s are converted into equity.

    — CNBC’s Sophie Kiderlin contributed to this report.

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  • Fintech targeted by climate skeptics banks $37 million from likes of UBS, Commerzbank

    Fintech targeted by climate skeptics banks $37 million from likes of UBS, Commerzbank

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    From left to right: Johan Pihl, Doconomy’s chief creative officer and co-founder, and Mathias Wikstrom, chief executive officer and co-founder.

    Doconomy

    Swedish climate-focused financial technology startup Doconomy told CNBC on Thursday that it’s raised 34 million euros ($36.9 million) from leading European banks, including UBS and Commerzbank.

    Doconomy, which offers tools to help bank customers measure the carbon footprint of their everyday spending, raised the cash in a Series B financing round co-led by UBS Next and CommerzVentures, the venture arms of UBS and Commerzbank, respectively.

    Credit ratings agency S&P Global came on board as a new investor, while existing shareholders Motive Ventures, PostFinance and Tenity also participated.

    Founded in Sweden in 2018, Doconomy works with the likes of Boston Consulting Group, Mastercard, S&P Global, and the United Nations Framework Convention on Climate Change to calculate the climate cost associated with financial transactions.

    Among the firm’s tools is the AIand Index, a cloud-based service for banks that helps their customers convert every transaction into its corresponding CO2 footprint. The index is used by more than 100 financial institutions in more than 40 countries.

    Doconomy plans to use the fresh cash to drive expansion into North America and roll out new products, CEO and co-founder Mathias Wikstrom told CNBC in an interview.

    “Going forward, we want to enable every bank in every corner of the world to engage their clients in the ESG [environmental, social, and governance] work of the bank,” Wikstrom said. “We see a connection between the E and S, the environmental and the social. We can’t isolate those two different streams.”

    Wikstrom said he was “very happy” to see partnerships emerging with the likes of UBS and Commerzbank, describing it as an “alliance of the winning both money and intellect into getting this issue under control.

    Politicization of climate

    News of Doconomy’s latest funding follows the firm’s February 2023 deal to acquire Dreams Technology, a platform that uses behavioral science to boosts customers’ digital engagement and financial wellbeing.

    Wikstrom said that Doconomy’s valuation in its Series B round is unchanged from the price at which it raised funds in its Series A, which saw the firm raise cash from the likes of Citi Ventures, Mastercard, and Ikea parent company Ingka.

    Doconomy’s growth story hasn’t come without its challenges. More recently, the firm faced attacks from right-wing online commentator Jordan Peterson and his followers.

    It’s not really hurricane season anymore, it’s fear season.

    Mathias Wikstrom

    CEO, Doconomy

    Last week, Peterson targeted the company in a post on social media platform X, labelling it the “soft positive planet-saving voice of the worst imaginable corporate/fascist/green tyranny.”

    The Canadian psychologist, who gained internet fame critiquing so-called political correctness, is a noted skeptic who described climate change as “the idiot socialist get-out-of-jail-free card.” He once framed rising greenhouse gas emissions as a positive for making the planet “green in the driest areas.”

    Climate scientists say this is misleading, as it doesn’t take into account the negative effects intensified droughts, wildfires and heatwaves caused by global warming have on plants and ecosystems.

    Wikstrom told CNBC that the situation concerning Peterson’s attacks on his firm “illustrates that we need to educate a lot of people.”

    “Fear will lead to frustration and frustration will potentially lead to protests, and protests will lead to violence and violence will lead to damage done,” he told CNBC.

    Wikstrom said that he hopes that the more the likes of Peterson and other climate skeptics keep “banging the drum,” the likelier that their sentiments will eventually sound “hollow.”

    “Looking at what’s happening in Hawaii, in Canada, in France, in Spain, in Greece — we have the floods, we have the fires, we have so many concerns now,” he said. “It’s not really hurricane season anymore, it’s fear season.”

    Climate fintech is a niche area of financial technology that has attracted heightened interest from investors, as world governments push corporates to hit ESG targets and reduce carbon emissions associated with their operations.

    Michael Baldinger, chief sustainability officer of UBS, said the bank’s venture investment into Doconomy “underscores our focus on fostering innovation to provide the data and actionable insights our clients need to make informed choices about their investments and effect the change they want to see.” 

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  • UBS overhauls wealth management leadership in wider board shake-up

    UBS overhauls wealth management leadership in wider board shake-up

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    The three keys USB logo is seen outside the London office of Swiss bank UBS in central London, on March 20, 2023.

    Daniel Leal | AFP | Getty Images

    LONDON — UBS on Thursday announced a shake-up of its executive board in the latest phase of a radical overhaul of the Swiss banking giant, following its takeover of fallen rival Credit Suisse.

    A newly split global wealth management division, led by co-presidents Iqbal Khan in Asia-Pacific and Rob Karofsky in the U.S., sees the bank double down across the two geographies as part of what it has dubbed its “sustainable, strategic growth” strategy.

    It marks the first time a divisional UBS president has been based in Asia-Pacific, the bank said.

    The new appointments provide an important signal on the future direction of the bank, as it tees up a replacement for outgoing CEO Sergio Ermotti, who is expected to step down by early 2027.

    “The appointments to the Group Executive Board we are announcing today will allow us to continue to progress on our integration journey and realize the expected synergies and efficiencies, while putting even more emphasis on our long-term priorities and growth prospects, particularly in the Americas and Asia-Pacific,” Ermotti said in a statement.

    George Athanasopoulos and Marco Valla also join the executive board as co-presidents of the investment bank, alongside Damian Vogel, incoming global chief risk officer.

    The trio replace outgoing board members Credit Suisse CEO Ulrich Korner, UBS Asia-Pacific President Edmund Koh, and UBS Americas Regional President Naureen Hassan.

    The reshuffle comes as part of a wider overhaul of the bank, following its emergency rescue last year of Credit Suisse — a shotgun marriage brokered by Swiss authorities to prevent the then 167-year-old institution’s collapse and protect the Swiss economy.

    The FT reported Monday that UBS had ruled out an outsider as successor to Ermotti, who returned last year to steer the bank through its mammoth takeover.

    The bank is said to be choosing from a shortlist of three internal candidates to assume the CEO role when Ermotti steps down in around three years’ time. A name could be announced as early as next year, sources told the FT.

    UBS did not immediately respond to CNBC’s request for comment on the reports.

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  • MSCI (NYSE:MSCI) Price Target Cut to $575.00 by Analysts at UBS Group

    MSCI (NYSE:MSCI) Price Target Cut to $575.00 by Analysts at UBS Group

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    MSCI (NYSE:MSCI – Free Report) had its target price decreased by UBS Group from $700.00 to $575.00 in a research report report published on Wednesday, Benzinga reports. UBS Group currently has a buy rating on the technology company’s stock.

    MSCI has been the subject of several other research reports. The Goldman Sachs Group lowered their price target on shares of MSCI from $615.00 to $526.00 and set a neutral rating for the company in a research report on Wednesday. StockNews.com lowered shares of MSCI from a buy rating to a hold rating in a research report on Tuesday, February 20th. Wells Fargo & Company upped their price target on shares of MSCI from $615.00 to $660.00 and gave the stock an overweight rating in a research report on Wednesday, January 31st. Redburn Atlantic lowered shares of MSCI from a neutral rating to a sell rating and lowered their price target for the stock from $620.00 to $470.00 in a research report on Tuesday, February 20th. Finally, Oppenheimer restated a market perform rating on shares of MSCI in a research report on Wednesday. Three analysts have rated the stock with a sell rating, six have given a hold rating and nine have given a buy rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of Hold and a consensus price target of $562.87.

    Check Out Our Latest Analysis on MSCI

    MSCI Trading Up 4.2 %

    Shares of MSCI stock opened at $464.81 on Wednesday. The stock has a market capitalization of $36.82 billion, a price-to-earnings ratio of 31.73, a PEG ratio of 2.24 and a beta of 1.06. MSCI has a twelve month low of $439.95 and a twelve month high of $617.39. The business’s 50 day simple moving average is $545.76 and its 200-day simple moving average is $538.56.

    MSCI (NYSE:MSCI – Get Free Report) last issued its earnings results on Tuesday, April 23rd. The technology company reported $3.52 earnings per share for the quarter, topping the consensus estimate of $3.44 by $0.08. MSCI had a negative return on equity of 111.33% and a net margin of 44.55%. The firm had revenue of $680.00 million for the quarter, compared to analyst estimates of $685.47 million. During the same period last year, the company earned $3.14 earnings per share. The firm’s revenue for the quarter was up 14.8% on a year-over-year basis. Sell-side analysts predict that MSCI will post 14.81 earnings per share for the current year.

    MSCI Dividend Announcement

    The firm also recently disclosed a quarterly dividend, which will be paid on Friday, May 31st. Stockholders of record on Friday, May 17th will be given a dividend of $1.60 per share. The ex-dividend date is Thursday, May 16th. This represents a $6.40 annualized dividend and a dividend yield of 1.38%. MSCI’s dividend payout ratio (DPR) is 43.69%.

    Institutional Trading of MSCI

    Hedge funds have recently bought and sold shares of the company. Rise Advisors LLC purchased a new stake in MSCI during the first quarter valued at about $26,000. Optiver Holding B.V. purchased a new stake in shares of MSCI in the third quarter worth approximately $26,000. ORG Partners LLC increased its holdings in MSCI by 5,600.0% in the third quarter. ORG Partners LLC now owns 57 shares of the technology company’s stock worth $29,000 after buying an additional 56 shares during the last quarter. Headinvest LLC acquired a new position in MSCI in the third quarter worth approximately $30,000. Finally, American National Bank increased its holdings in MSCI by 1,300.0% in the fourth quarter. American National Bank now owns 70 shares of the technology company’s stock worth $40,000 after buying an additional 65 shares during the last quarter. 89.97% of the stock is owned by hedge funds and other institutional investors.

    MSCI Company Profile

    (Get Free Report)

    MSCI Inc, together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct.

    Featured Articles

    Analyst Recommendations for MSCI (NYSE:MSCI)

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  • UBS chair says Swiss banking giant is not ‘too big to fail’

    UBS chair says Swiss banking giant is not ‘too big to fail’

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    Fabrice Coffrini | Afp | Getty Images

    UBS Group Chairman Colm Kelleher on Wednesday said that the Swiss bank is “not too big to fail,” as he criticized Swiss government proposals to strengthen its capital requirements.

    Kelleher was delivering a speech during the UBS Annual General Meeting — the first such gathering held since the bank completed the takeover of its former rival Credit Suisse last summer.

    “UBS is not too big to fail. UBS is one of the best capitalized banks in Europe, with a sustainable business model and a corresponding low-risk balance sheet,” Kelleher said.

    He added that the bank was “seriously concerned” about current discussions around additional capital requirements, which he argued would curb Switzerland’s competitiveness as a financial center and increase European regulatory fragmentation.

    Kelleher said the example of Credit Suisse, which collapsed in March 2023 after years of scandals and risk management failures, showed there “can be no regulatory solution for a broken business model.”

    “It was not too low capital requirements that forced Credit Suisse into the historic weekend rescue,” Kelleher told the AGM.

    He noted that capital requirements for “global systemically important banks” had become much stronger since the 2007-08 financial crisis, saying that effective loss-absorbing capacity worldwide was now around 20 times stronger, with UBS’s own at over $200 billion.

    The Swiss government earlier this month made a range of recommendations aimed at protecting the wider economy from potential instability at UBS and three other major banks.

    While it did not specify exactly what such stricter capital requirements would entail, the Swiss administration said that they should be “tightened in a targeted way” and singled out UBS as requiring a “substantial” increase.

    The proposals target banks judged “too big to fail” — a term that rose in usage following the financial crisis to describe institutions that were too systemically important to national economies for governments to allow them to collapse. This de facto state backstop was widely criticized for enabling risk-taking behavior and mismanagement.

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  • ‘Lose-lose situation’: New Swiss bank laws could derail UBS’ challenge to Wall Street giants

    ‘Lose-lose situation’: New Swiss bank laws could derail UBS’ challenge to Wall Street giants

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    Sergio Ermotti, CEO of Swiss banking giant UBS, during the group’s annual shareholders meeting in Zurich on May 2, 2013. 

    Fabrice Coffrini | Afp | Getty Images

    Switzerland’s tough new banking regulations create a “lose-lose situation” for UBS and may limit its potential to challenge Wall Street giants, according to Beat Wittmann, partner at Zurich-based Porta Advisors.

    In a 209-page plan published Wednesday, the Swiss government proposed 22 measures aimed at tightening its policing of banks deemed “too big to fail,” a year after authorities were forced to broker the emergency rescue of Credit Suisse by UBS.

    The government-backed takeover was the biggest merger of two systemically important banks since the Global Financial Crisis.

    At $1.7 trillion, the UBS balance sheet is now double the country’s annual GDP, prompting enhanced scrutiny of the protections surrounding the Swiss banking sector and the broader economy in the wake of the Credit Suisse collapse.

    Speaking to CNBC’s “Squawk Box Europe” on Thursday, Wittmann said that the fall of Credit Suisse was “an entirely self-inflicted and predictable failure of government policy, central bank, regulator, and above all [of the] finance minister.”

    “Then of course Credit Suisse had a failed, unsustainable business model and an incompetent leadership, and it was all indicated by an ever-falling share price and by the credit spreads throughout [20]22, [which was] completely ignored because there is no institutionalized know-how at the policymaker levels, really, to watch capital markets, which is essential in the case of the banking sector,” he added.

    The Wednesday report floated giving additional powers to the Swiss Financial Market Supervisory Authority, applying capital surcharges and fortifying the financial position of subsidiaries — but stopped short of recommending a “blanket increase” in capital requirements.

    UBS shares move lower after politicians request strong capital requirements

    Wittman suggested the report does nothing to assuage concerns about the ability of politicians and regulators to oversee banks while ensuring their global competitiveness, saying it “creates a lose-lose situation for Switzerland as a financial center and for UBS not to be able to develop its potential.”

    He argued that regulatory reform should be prioritized over tightening the screws on the country’s largest banks, if UBS is to capitalize on its newfound scale and finally challenge the likes of Goldman Sachs, JPMorgan, Citigroup and Morgan Stanley — which have similarly sized balance sheets, but trade at s much higher valuation.

    “It comes down to the regulatory level playing field. It’s about competences of course and then about the incentives and the regulatory framework, and the regulatory framework like capital requirements is a global level exercise,” Wittmann said.

    UBS: Can't rely on a crisis to facilitate bank mergers

    “It cannot be that Switzerland or any other jurisdiction is imposing very, very different rules and levels there — that doesn’t make any sense, then you cannot really compete.”

    In order for UBS to optimize its potential, Wittmann argued that the Swiss regulatory regime should come into line with that in Frankfurt, London and New York, but said that the Wednesday report showed “no will to engage in any relevant reforms” that would protect the Swiss economy and taxpayers, but enable UBS to “catch up to global players and U.S. valuations.”

    “The track record of the policymakers in Switzerland is that we had three global systemically relevant banks, and we have now one left, and these cases were the direct result of insufficient regulation and the enforcement of the regulation,” he said.

    “FINMA had all the legal backdrop, the instruments in place to address the situation but they didn’t apply it — that’s the point — and now we talk about fines, and that sounds like pennywise and pound foolish to me.”

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  • Data centers are set for an AI-fueled boost, UBS says — naming 3 stocks to play the trend

    Data centers are set for an AI-fueled boost, UBS says — naming 3 stocks to play the trend

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  • UBS CEO says integrating Credit Suisse will become a ‘case study’ for future big bank mergers

    UBS CEO says integrating Credit Suisse will become a ‘case study’ for future big bank mergers

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    The mammoth integration of failed bank Credit Suisse into its former rival UBS will act as a “case study,” UBS CEO Sergio Ermotti said Friday, one that will show that big bank mergers should be allowed.

    “It’s going to be a case study to be evaluated globally, but also particularly in Europe, where eventually the necessity of creating stronger banks, and stronger and more competitive banks from a global standpoint of view, is in my point of view a necessity,” Ermotti told CNBC’s Steve Sedgwick at an event at the Ambrosetti Spring Forum in Italy.

    “Of course, we can’t just rely on a crisis to create or facilitate the merger of banks,” Ermotti said.

    “It’s good to have strong players that can be part of the solution, like UBS was in the Credit Suisse case. … But it cannot be just that part. So in that sense, I think that the real issue is, there has to be a political desire to facilitate something like that. So it’s not the reality of today,” he added.

    Credit Suisse collapsed in March 2023 after years of underperformance, scandals and risk management crises. UBS in June completed its takeover of the 167-year-old bank in a deal controversially brokered by Swiss authorities.

    The Swiss National Bank has said the size of the new entity flags potential competition issues that will need to be monitored.

    One year since the collapse of Credit Suisse

    Ermotti said Friday, “The good news is that, in my view, in many countries, there is a recognition that they want to protect their banks or financial institutions as national champions, which is an implied or explicit recognition of their value for their economies.”

    “But the bad news is that they don’t realize that in order to really be meaningful, and go to the next level of their contribution in their economies, they will need to be also more competitive globally. But without a banking union, without a capital markets union, it’s going to be very, very difficult for Europe to compete with U.S. large banks.”

    Unlike in the U.S., European economies continue to rely on the banking sector for business financing; and Europe has a “completely different playing field and a lack of critical mass,” Ermotti said.

    “So I hope, I’m not so convinced it’s going to happen soon, but I hope eventually one day those kinds of mergers between big banks will be allowed and we can contribute to that by showing that it’s possible. In the meantime, I think that in many countries, critical mass and synergies can be created by further rounds of local mergers,” he said.

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  • UBS chief’s surprise return to the Swiss banking giant bagged him a $15.9 million paycheck

    UBS chief’s surprise return to the Swiss banking giant bagged him a $15.9 million paycheck

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    Newly appointed UBS CEO Sergio Ermotti (R) speaks with UBS Chairman Colm Kelleher during a press conference in Zurich on March 29, 2023.

    Arnd Wiegmann | Afp | Getty Images

    UBS CEO Sergio Ermotti earned 14.4 million Swiss francs ($15.9 million) in 2023 after his surprise return at the helm of the Swiss banking giant, following its takeover of stricken rival Credit Suisse.

    The bank announced in late March that Ermotti would return for a second spell as CEO, replacing Ralph Hamers from April 5 last year, as UBS undertook the mammoth task of integrating Credit Suisse’s business. Ermotti’s previous tenure ran from 2011 to 2020.

    Hamers earned 12.6 million Swiss francs in 2022 during his last full year as CEO, according to UBS’ annual report published on Thursday.

    The figures total base and variable compensation.

    In total, the bank’s executive board picked up a 140.3 million Swiss franc pay package in 2023, a significant increase from the previous year’s 106.9 million francs.

    Bonuses paid to employees at the new combined bank totaled $4.5 billion, UBS revealed, the majority of which was paid in cash.

    This marked a 14% reduction compared with the aggregate 2022 pool of $5.3 billion for the combined entities, as UBS looks to cut costs as part of its integration of Credit Suisse.

    The bank last month reported a second consecutive quarterly loss on the back of integration costs, but continued to deliver strong underlying operating profits.

    UBS shares have gained more than 52% since Ermotti took the reins on April 5, 2023.

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  • UBS beats earnings expectations, announces up to $1 billion share buyback

    UBS beats earnings expectations, announces up to $1 billion share buyback

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    Fabrice Coffrini | Afp | Getty Images

    Swiss banking giant UBS on Tuesday narrowly beat fourth-quarter earnings expectations and announced that it would recommence share buybacks worth up to $1 billion in the second half of the year.

    The group posted a net loss attributable to shareholders of $279 million for the quarter, its second consecutive loss due to the costs of integrating fallen rival Credit Suisse. However, analysts polled by LSEG had expected a wider net loss of $372 million.

    Along with the share buybacks, UBS plans to propose a dividend per share of $0.70, up 27% year-on-year.

    In the third quarter, UBS had posted a bigger-than-expected net loss attributable to shareholders of $785 million — which factored in $2 billion in expenses related to the integration of fallen rival Credit Suisse.

    After that third quarter report, the market chose to focus on the bank’s strong underlying operating profit before tax, which was well ahead of expectations. For the fourth quarter, that came in at $592 million, below a company-compiled consensus of $762 million.

    “I’m very pleased that, on an underlying basis, we saw actually good profitability, and we saw also good momentum with clients. We had $22 billion of inflows in net new assets and also saw very good inflows in deposits across both wealth management and the P&C (personal and corporate banking), we have managed down exposure in non-core and legacy,” UBS CEO Sergio Ermotti told CNBC on Tuesday.

    “We also made further improvements in our targets to deliver cost savings by achieving a $4 billion exit rate in cost savings in 2023, so all that contributed to good results, and this gives us the confidence to now tackle the next phase of our restructuring and integration.”

    UBS has so far reported a quicker than expected return of client inflows to Credit Suisse’s wealth management business since the takeover, which it completed in June 2023.

    The integration of its stricken rival continues, with UBS embarking on a process of cutting around 3,000 Credit Suisse jobs as part of the wider restructure.

    UBS announced on Tuesday that it had completed the first phase of the strategic integration, and that the full merger is expected to be completed by the end of the second quarter.

    Here are some other highlights:

    • Total group revenues were $10.86 billion, down from $11.7 billion in the third quarter.
    • CET1 capital ratio, a measure of bank liquidity, was 14.5%, compared to 14.4% the previous quarter.
    • Net new assets in the flagship Global Wealth Management were $77 billion, while net new deposits across GWM and the personal and corporate banking division also totaled $77 billion, since closing the Credit Suisse acquisition in 2023.
    • For the fourth quarter, GWM net new assets were $21.8 billion.

    Ermotti told CNBC’s Silvia Amaro on Tuesday that delays are the biggest risk to the Credit Suisse integration, given the tight targets UBS has set for itself.

    “2024 is a pivotal year in that sense, because we are merging in the first half of the year our two parent companies, we are merging the U.S. operation, we are merging the Swiss operations, and this will allow us then to start to realize the synergies,” Ermotti said.

    “The IT migration is the second major potential problem but we have a very concrete plan. If you think about it, we have 6,000 deliverable tasks that we need to execute, so we are planning very carefully and also in a way that doesn’t create concentration risk in the execution.”

    UBS shares have made an indifferent start to 2024, and were down 3.3% in early trade on Tuesday.

    Market to look past ‘accounting noise’ in coming years

    Given the various costs associated with the integration, the market will look past the headline figures in UBS earnings and focus on more fundamental indicators for the next few years, according to Morningstar Equity Analyst Johann Scholtz.

    “UBS has guided that they are looking only towards 2027 before we are really going to arrive at the situation where all of the accounting noise will be out of the results, but I think there are some other numbers that we can look at that give us a good indication of the underlying health of the business,” Scholtz told CNBC’s “Capital Connection” on Tuesday.

    2024 could be a more challenging year for UBS 'from a revenue perspective': Analyst

    He suggested the key number to focus on is net new money growth in the wealth management division, particularly the Credit Suisse legacy portion of that business.

    “The reason why net new money is really that important is because assets under management obviously includes market movement, so it really gives you a good indication of whether the combined entity manages to hold onto clients, and even possibly gain back some of the clients that Credit Suisse lost in its wealth management division due to concerns about the health of the Credit Suisse business,” Scholtz explained.

    “It’s also important to take note that the Credit Suisse portion of the wealth management business has actually been close to a breakeven, slightly loss-making position, so it’s really vital for that division that it gets some new assets under management to improve its fee income and return to profitability.”

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  • Gold prices to hit $2,200 and a ‘dramatic’ outperformance awaits silver in 2024, says UBS

    Gold prices to hit $2,200 and a ‘dramatic’ outperformance awaits silver in 2024, says UBS

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    Gold and silver bars of various sizes lie in a safe on a table at the precious metals dealer Pro Aurum in Munich.

    Sven Hoppe | Picture Alliance | Getty Images

    Gold and silver are expected to climb further in 2024 on expectations that the U.S. Federal Reserve will start cutting interest rates, UBS forecasts.

    “We are expecting gold to be pushed higher by a Fed easing. Also this comes with a weaker dollar” said the investment bank’s precious metals strategist Joni Teves, who expects the metal to hit $2,200 per ounce by the end of the year.

    Gold prices tend to have an inverse relationship with interest rates. As interest rates dip, gold becomes more appealing compared to alternative investments like bonds, which would yield weaker returns in a low interest rate environment. 

    In turn, lower rates weaken the dollar, making gold cheaper for international buyers, driving up demand.

    While there is still much uncertainty on the timing and extent of rate cuts, UBS maintained its expectations for the Federal Reserve to ease policy. Last week, the Fed announced its decision to leave rates unchanged in January, on top of shooting down hopes of a rate cut in March. 

    In a scenario where the Fed is easing, we think silver can do really well. It tends to outperform a move in gold.

    The bullion’s appeal as a safe haven asset has risen since Israel’s war with Hamas began on Oct. 7, which contributed to gold prices notching an all-time high of $2,100 an ounce last month.

    “We do think investors will start to build allocations to gold in an environment where there is a lot of macro uncertainty [and] geopolitical risks,” said Teves.

    Prospects for gold’s “poorer cousin” are also optimistic, with silver on course to “really, really shine.”

    Silver is not as common of a geopolitical and safety haven compared to gold, which partly explains why it has underperformed gold in the last few years, the strategist said. But the tables could turn in its favor when the Fed eases.

    “In a scenario where the Fed is easing, we think silver can do really well. It tends to outperform a move in gold,” Teves said. “Silver has been underperforming gold quite a lot. So there is a lot of catching up to do and I think the move could be quite dramatic,” she added.

    Silver’s performance is tied closely to the health of the overall economy due to its wide industrial applications. The precious metal is commonly incorporated in the manufacturing of automobiles, solar panels, jewelry and electronics.

    Gold last traded at $2,052 per ounce, while silver was priced at $22.69 per ounce.

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  • UBS CEO says Swiss public 'indoctrinated' to worry about bank's balance sheet

    UBS CEO says Swiss public 'indoctrinated' to worry about bank's balance sheet

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    Sergio Ermotti, chief executive officer of UBS Group

    Stefan Wermuth | Bloomberg | Getty Images

    UBS CEO Sergio Ermotti on Wednesday said people with concerns about the size of the bank’s balance sheet are getting “indoctrinated” by academics and should “do their homework.”

    UBS completed its takeover of Credit Suisse in June 2023 after an emergency rescue deal was brokered by Swiss authorities to prevent the then 167-year-old institution’s collapse and protect the Swiss economy.

    Ermotti was brought back to the helm of UBS to oversee the complex integration of Credit Suisse’s business — a mission thus far deemed a resounding success by the market. The bank’s share price has recovered from below 17 Swiss francs ($19.69) per share in the aftermath of the deal to over 25 Swiss francs as of Wednesday morning.

    However, the new entity’s combined balance sheet is estimated to be around twice the size of the entire GDP of Switzerland, raising concerns about the concentration of risk in the Swiss economy.

    Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, on Wednesday, Ermotti said he understood why some portions of the Swiss population still have reservations, as they are being “indoctrinated almost daily by a lot of academics” and focusing solely on the size of the bank’s balance sheet versus the national GDP.

    “If you look at risk-weighted assets as a percentage of GDP or as a percentage of our balance sheet, you will discover that the new UBS is de facto very low risk, very focused business model. The risk we have is in Swiss mortgages, in Lombard loans, in stuff that is very low risk,” he said.

    Ermotti contended that the “new UBS” incorporating its fallen rival to create a globally competitive, low-risk bank is a “reflection of Switzerland.”

    “Switzerland is a small country that punches well above its weight in many sectors — in food, in pharma, in innovation — and having a strong bank that can compete, not only in Europe, but globally, is part of our economy,” he said.

    He also argued that the focus on the risk to the Swiss taxpayer fails to take into account the scale of the bank’s own tax contributions, urging the public to “look at the risks but also the benefits.”

    “In that sense, our role is to help the people who are not convinced, that want to listen to arguments, to inform them so that they come to an opinion that is informed, hopefully the right one. I respect people having other opinions, but I do expect them to do their homework,” he added.

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