UBS Group (UBS.US) CEO Sergio Ermotti has indicated that global political instability is prompting clients to realign their investment portfolios, a trend from which UBS's business is benefiting and one he anticipates will continue for several years. In a recent interview, Ermotti stated, "Geopolitical and macroeconomic uncertainties are fueling market volatility, and I firmly believe we will all have to contend with this reality for approximately the next decade." He noted that this environment is encouraging clients to geographically diversify their investments, which will likely lead to a reduced allocation to US assets in the future. "I'm not suggesting a wholesale exit, reduction, or sell-off of US assets, but rather utilizing idle liquidity to achieve greater diversification," Ermotti clarified, adding that UBS, with its global network of booking centers, is well-positioned to provide these services and is consequently benefiting from these client adjustments.
Addressing the recent sell-off in global software and technology stocks, the CEO commented that valuations in these sectors still require "some correction." "It is evident that valuations in certain segments are frothy," he observed, while also expressing his belief that the societal transformation driven by artificial intelligence (AI) will have profound and lasting effects, stating that "in this process, there will inevitably be winners and losers within the industry."
Ermotti also disclosed that approximately 150,000 of the most complex clients within Switzerland are still pending migration; once this process is finalized, UBS will proceed to decommission Credit Suisse's related information technology systems and data centers. It is understood that the integration of Credit Suisse, which UBS acquired in 2023 for $30 billion, is now in its final year. Concluding his remarks, Ermotti reiterated that the UBS board is evaluating external candidates for the CEO succession plan, while he himself emphasized his commitment to remain in his role until "at least" 2027.
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