I think it's already good that we can keep a good buffer vis a vis our plans. I think that I'm particularly pleased that not only on the cost and risk reductions, but also in the client migration. We are doing good progress. We did a migration of clients in Luxembourg early this month and in Hong Kong over the last weekend and they were successful, which sort of makes me confident that we can go to the next step with and bring clients together. So this is basically also about IT mergers.
Is there anything in that that worries you?
Well, IT mergers is a big task. We are migrating under ten petabytes of data. One big one petabytes is 500 billions of pages. So it's a pretty complex thing, but we are migrating data. We are not submerging systems and so far so good. But there is no room for complacency for sure.
What's your biggest worry in the next 12 months?
Uh, on the integration in France, I think that's, it's, it's yeah, that's, you know, of course is a complex task and therefore things can go wrong. But for me it's not a matter of if we do it or not, but rather can we do it on time, and then the rest is clearly the macro and geopolitical front is full of open issues that hopefully gets addressed. But if they come all together at one stage, they can create dislocation.
Is that why you were cautious about the fourth quarter and what does that mean for client activity?
Well, the fourth quarter, as in any case, elements of seasonality. And but again, if I look at the macro and geopolitical front, the US election for sure won't be an uneventful topic. So I think that no matter who wins and how they win and how things play out, you're going to see the changes and movements in markets. And so it remains to be seen how investors will react to that.
The US election is exactly seven days from now. So how do you prepare for that?
Well, we are prepared to basically stay close to clients advising them and, you know, on how to eventually position themselves and take advantage of any movements. But also from a Bankston point of view, of course, we are always prepared for major events.
So what do you exactly worry about? Is it market volatility, uncertainty, or is it also the impact, for example, of a Trump presidency on tariffs and on bank regulation?
No, that one is not really the issue. I think that's right. Now, markets are pricing right a Trump victory and think that if this is confirmed, it remains to be seen. Is a classical sell on news event or how he wins will be also determining, you know, is in control of the Congress if Kamala Harris wins. You know, of course, some of the trades that are ongoing in the, you know, for Trump but will probably have to be reconsidered and therefore they're going to create rotations in the markets and order movements. So I think as I mentioned, it's not going to be an uneventful topic.
Does that mean, you know, extra inflation and how do you think it impacts, you know, is there going to be a standstill of M&A again, depending on what happens and who wins and how they win?
No inflation, I don't know. Inflation is probably going to be more, you know, a consequence of the ability of central banks to really do the last touch and really bringing core inflation below their targets. And the risk there is probably more coming from the geopolitical front or any dislocation in respect of supply chains. Energy access to energy prices can bring back inflation to a level that may slow down the pace of rate cuts. And uh, but on the rest, I think that we are well prepared for any scenario.
A surge on share buybacks. I mean, do you have a pretty hefty, you know, number that you want to give back? How is there anything that puts that at risk?
Well, I mean, it's fairly modest compared to what UBS and other banks are doing nowadays is somehow reflecting the fact that we are still midway into the integration. We need to still absorb a lot of cost to restructure and Credit Suisse. So I think that's despite the fact that we have very strong results. We still are halfway in the journey to restore the profitability levels that are allowing us to have the similar return on capital we had before the acquisition. But again, there are many questions about the extra capital requirements also by the Swiss authorities.
Does that how does that impact actually your thinking on share buybacks and dividend?
That it's a consideration. So we always have to think about. But in the short term, this is not going to affect our policy. We are executing our 2024 plans and we believe that also for 2025, this will not be a major issue. And there and then of course, we have to consider all the elements. But our aim is to continue to basically our aim is to deliver same levels of capital returns UBS had before the acquisition by the end of 2026.
How are your conversations going with Swiss authorities on these capital requirements and where do you think they'll land? There's a range between 10 billion and 20 billion.
