Global Crises Cause UBS to Change Its Plans

Global uncertainty following a trifecta of crises is keeping wealth clients in a holding pattern, UBS Group AG Chief Executive Officer Ralph Hamers told Bloomberg News.

“We had to digest 3 major shocks: the pandemic shock, the war shock, and the energy transition shock,” Hamers said. “Supply shocks and demand shocks all mixed in one. So of course it is unclear at this moment in time.”

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Rising interest rates, inflation, and the impact of China’s strict COVID-19 policies on the global economy have left his clients shaky, he said, sensing that an unknown future is to blame. Russia’s invasion of Ukraine has also put banks like the Switzerland-based UBS in new territory. Many had a hard time navigating sanctions imposed on their Russian clients, particularly due to limited direction from governments at the outset.

“It has become much clearer . . . compared to the beginning where it had been developed in a haphazard way,” Hamers said.

UBS began winding down its business in Russia earlier this year. It is planning to focus on growth in Asia and the U.S., where it hopes to lower costs and compete with Wall Street banks. Earlier this year, UBS bought robo-advisor Wealthfront as it aims to further digitize its operations.

Hamers said he’s confident that UBS can go toe to toe with U.S. institutions. “We are as much of a U.S. player as we are a Swiss player.”

At the moment, banking deals in Europe are less attractive, he said. “As long as the local authorities sit on the capital and on the liquidity, there’s not a lot of benefit for cross-border consolidation in the Eurozone.”