Let's get out to Davos where Bloomberg Surveillance anchor John Ferroh is standing by. John, take it away.
Hey guys, live from Davos, Switzerland at the World Economic Forum, standing by the king of Swiss banking. He might not like that introduction. It's Sergio Ermotti, the UBS CEO. Sergio, good to see you.
Thanks for braving the cold. I appreciate it. Before we get into the bank, we're going to ease into this and start with financial markets. What a start to the trading week stateside. Equities open up, gap lower, bond yields higher, dollar weaker. We've seen this movie before last April. Got over it pretty quickly. We've thrown a lot at this market in the last 12 months. It hasn't stuck. Is there something different about the way we're set up for 2026?
I would say that it's probably the accumulation of issues that are now out there and not resolved that is becoming a little bit troubling in my point of view. So I think that this is the only major change, but we have to stay tuned for more volatility going forward and unpredictability and rapid changes. So I think that staying diversified in financial markets nowadays is pretty important.
Let's get to what that word means — diversify. It feels like that's a diplomatic way of saying 'sell America' sometimes. And I'm not going to put words in your mouth. I'll tell you what others are saying. PIMCO is talking about a multi-year period of diversification away from US assets. We've seen from others moving out of US Treasuries. There was a headline earlier this morning about a very small Danish pension fund, and they've got their own issues in Denmark right now given their relationship with America. What are you seeing develop?
Well, diversifying away from America is impossible. I think that in any major asset allocation, one could probably think about having an overweight or underweight, but diversifying away from the US and also from the dollar is a quite dangerous bet. Things can change rapidly and the US is the strongest economy in the world, the one who has the highest level of innovation. Right now it's a little bit bumpy, but I wouldn't really bet against the US.
There seems to be a difference between how the politicians and the policymakers talk about America right now and the backdrop for international relations, and how a business person thinks of America, the economy, and the opportunity. I've mentioned this stat a number of times already today about the survey that PWC put out. They surveyed 4,500 CEOs and the top destination for capital for investment: America. And it was up on last year. As a bank boss right now, a CEO who's thinking about expanding around the world, why is the US still top of mind for you?
Well, because from our central point of view, we see two big levers. First of all, wealth creation, GDP growth, innovation, and also more idiosyncratic to UBS is that we see potential for us to become more present, increase our market share. So that's one place. On the other end, we are also very big in Asia. We manage one trillion of assets there. We are growing very fast. The economy is growing. Half of the population in the world is living there and is creating new wealth. But in the Americas, in the US by the way, last year the US created 25 million new millionaires. So basically 1,000 millionaires a day. So it's a place for a financial institution, a wealth manager like UBS, to be.
Well, let's talk about that. Is that something you want to do organically or through an acquisition?
I think that we have enough to do organically by doing better what we can do. We are enhancing our product capabilities. We just got our national charter application approved by the OCC. We are expanding our interaction between the investment bank and our wealth management people. So I think there are more things we can do to get better and stronger.
It sounds like you're on the front foot. At the same time as the bells ringing behind me, I'm reminded of where we are, Switzerland, and the issues on the horizon potentially for the bank, and that's capital requirements. It feels like a cloud that's hanging over this bank right now. How quickly do you think we can resolve it?
Not quickly. I think it's a political process. Most likely we're going to find out the direction of travel in the middle of the second quarter, and then it's still a political process. But if you're right that this is something that has been quite distracting for us, although we have been quite successful in managing the integration of Credit Suisse. It's almost completed. We are almost 3 months to go, and then the vast majority of the job is done. But we look forward to a resolution.
I'm sure you do. From a strategic standpoint, how is it holding you back? How is it distracting you? What are you prevented from doing that you would like to do right now?
At this point in time, to be fair, nothing. Because executing the integration is the top priority. We cannot be complacent. Although 90%, 85% is done, the last 15% is as important. We still need to take out 3 billion of cost and finalize the restructuring. And then we are prepared for growth. That's the reason why we are investing in top-line but also in efficiencies, AI, and how we become better and stronger.
