Updated Monday, July 28, 2014 as of 4:22 AM ET
- Bank Channel
Ermotti Says UBS Isn’t Considering Investment-Bank Spinoff
by: Bloomberg News
Monday, January 13, 2014
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(Bloomberg) -- UBS AG Chief Executive Officer Sergio Ermotti denied speculation that Switzerland’s biggest bank will spin off its investment-banking business to meet regulators’ demands for holding more capital.

“We are not considering that option,” Ermotti, 53, said in an interview with Stephen Engle on Bloomberg Television in Shanghai today. “We have very defined assets and capital that we want to put at work in the investment bank, and the business model works. Therefore, there is no necessity for us to make changes.”

Ermotti refuted a report by Mediobanca SpA analysts last week that Zurich-based UBS may dispose of the investment-banking business as higher capital requirements from regulators thwart efforts to boost returns. Ermotti is reorganizing the bank to cut 10,000 jobs and exit most debt-trading businesses while concentrating on money management to boost profitability.

The lender’s plan to increase its return on equity to 15% will be delayed by at least a year from an earlier target of 2015 after the Swiss regulator asked it to hold more capital for litigation risks, UBS said in October. Days later, Swiss Finance Minister Eveline Widmer-Schlumpf said leverage ratios are too low and banks may have to consider whether to keep securities businesses.

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