Bloomberg Host (3:37)

What's going to be your priority onshore for 2026? Last year you got the full 100% securities license. What's going to be the priority?

Sergio Ermotti (3:46)

We are, we are working on, on all of this. We also last year we also made a capital increase in, in our local entities and I think this year we are now planning to launch a Panda Bond. And so I think that we want to continue to foster our presence in China. We have been in China for mainland China for 35 years. We have been in Hong Kong for 60 years. So this is really part of our core business. I mean if you think about we are managing in the region more than a trillion of assets, 800 plus in wealth management and 250 in asset management. So we want to continue to reinforce that position but at the same time our leading position in the investment bank across the board and where we are a leader in the region and in China, mainland China particularly, and also in asset management through our very successful joint venture with icbc.

Bloomberg Host (4:45)

What can you tell us about the arranging of that Panda bond? The size and timing and the likes?

Sergio Ermotti (4:51)

This is still to be determined but the decision has been taken to a Panda Bond.

Bloomberg Host (4:56)

So onshore versus Hong Kong or Greater China. What's going to be the emphasis onshore as far as hiring? I mean you're very strong in wealth management obviously asset management. What's going to be the priority?

Sergio Ermotti (5:08)

Well look at this year I think that we, our goal is to continue to working with local universities, hiring young talents. We employ around 1300 people in China is a half of them are in Shanghai and the rest is in Beijing and, and the rest of Shenzhen. We, we, we probably going to have around 100 people this year in China and so but we are, you know, as I said, we are also investing not only in seasoned professionals but also in the young generation of, of of people for, for, for the franchise.

Bloomberg Host (5:46)

So obviously you still have some personnel issues on the cost reductions from the integration with credit suites that separate from what you're going to plan to hire across Asia and in China.

Sergio Ermotti (5:58)

Yeah, look, when I look at Asia in general, the integration is over, is done. So I think that we completed the integration in 20, actually in 2024, mainly in Asia across the board the investment bank has been closed and asset management the same. So as I just mentioned, we are hiring both in China, but broader, broadly speaking also in in Asia. In Japan for example, we have been expanding our capabilities and, and leveraging really the complementarity of Credit Suisse and UBS together where we not only have a broader footprint in terms of capabilities but also of geographic footprint.

Bloomberg Host (6:41)

How would you assess how your businesses in Asia are doing versus other regions, whether it's Europe or.

Sergio Ermotti (6:46)

Well, look, Asia has been growing, you know, very fast in the last, is probably the biggest engine of growth in nominal terms is accounting for around a quarter to 30% on average in the last five years of our profits. So as I mentioned, we manage more than a trillion of assets out of the 7 trillion we manage globally. So it's a growing, steady, growing business which when you look at the engine of growth is well, GDP growth is definitely going to help. Four and a half percent in China is quite important, but is a driver for growth in the entire region. We are selectively gaining some market shares in areas where we want to compete. And last but not least, this monetization, this IPO calendar is very important to our wealth management business because it's really helping us to drive net new money and new assets into our wealth management franchise.

Bloomberg Host (7:47)

Well, speaking of that IPO pipeline in Hong Kong, it's been quite strong a lot of the new economy companies. But there are also concerns of the new economy companies, whether it's Minimax or others, that profitability, just like the companies in the United States and Western markets, that the sustainability is not necessarily. It doesn't have a lot of visibility. What's your views on whether we're in a bubble and how long that potentially could still last?

Sergio Ermotti (8:14)

I don't know if we are in a bubble or not. But of course when you see this kind of multiples and, and, and, and performances, you have to ask yourself is this a repeat of what we saw in maybe in other time, 2001? Exactly, the TMT bubble and so on and so forth. I would say that in general, you know, first of all our advice is very clear. Diversification, no concentration of risk around the sector. The technology is here to stay. What. But we should not really mix the two issues. From an investor standpoint of view is very important to diversify, not to get into a trap of trying to pick up the right the winner or the loser. But, and, but you know, the truth of the matter is that the first wave was probably around the technology sector. Now we're going to see how embracing and implementing AI can help other parts of the economy become more vibrant and more efficient. And that's probably going to be also the next side of the story.

Bloomberg Host (9:21)

You also have to, you can't discount the fact that most of the deal flows right now are in China. The interest is in these new economy companies. So could you kind of quantify the type of deal flows, whether it's underwriting or other types of businesses or services from your bank that are tied directly to what has been a priority of central government policymakers here?

Sergio Ermotti (9:44)

Well, look, you know, but you know, this is something that is not really new. I mean the priorities for the central government on, around innovation being technology or, or pharma, biotech and so on has been there for a while. So from our standpoint of view what we are helping is, you know, local clients, but also foreign clients to really select the winners. I think it's quite impressive how the Chinese companies are able not only to be a fast followers but in some cases setting new standards for incumbents in the US So from my standpoint of view this is a big story to stay with us where we're going to see probably Chinese companies, you know, creating new frontiers of innovation rather than being a follower.

Bloomberg Host (10:38)

You've mentioned Japan twice already in the last six or seven minutes. What do you like about the Japanese story right now? Obviously that the market's doing really well. There are some pro growth policies from Taki Jisison, the new Prime Minister. What, what in particular do you like about Japan?

Sergio Ermotti (10:55)

Well, I have to say before year end I was in Japan and after 30 years of, you know, I, I felt for the first time a renewed sense of optimism across the board and you know, corporates, institutional investor, governments, regulatory bodies looking in a much more positive ways about. So I think Japan is the third largest wealth management market in the world in terms of savings. And it's quite clear to me that now that rates are coming up and you know, there is a new paradigm that is there to stay with us. And I do believe that also there you will see Japanese corporates probably looking to deploy more assets outside Japan, but also a renewed interest from foreign investors into Japan.

Bloomberg Host (11:51)

Where specifically would you like to grow in Japan and what kind of hiring you Were Talking about maybe 100 new positions here in China. What about Japan?

Sergio Ermotti (11:58)

Well, across the board in our core businesses. I mean outside, outside Switzerland, I mean de facto the three core activities. The you know, in wealth management we have a very successful joint venture with Sumitomo Mitsui Trust bank and that is growing and we want to foster in the investment bank of course in the investment banking in ECM and M& a reinforcing our presence in equities and in research where we are a leader in generally in Asia and last but not least in the asset management business.

Bloomberg Host (12:36)

Let's talk about the overall integration with Credit Suisse. You mentioned that in this part of the world and in China that integration pretty much was completed last year. And you've also said to us I think in September that the overall integration will be completed by the end of this current calendar first quarter. What are the biggest hurdles to overcome right now? I you know it integration is going to be a big one but also there's going to be some personnel issues that you have to resolve as you go through that cost cutting.

Sergio Ermotti (13:03)

So what are we going to do? By around, by the end of this first quarter we're going to migrate the balance of around 15% of the clients in Switzerland into the UBS platform. At that point in time all clients globally will be on a UBS system. Right, on a UBS platform. Then we're going to start to shut down IT centers, data centers and you know the fact in Switzerland we are still, you know we are still maintaining and running two separate IT systems. So shutting down that one will create the synergies real estate footprint and, and to some extent unfortunately also some personnel reduction Debt will continue to stay within what we announced in terms of proactive redundancy. We believe we're going to manage that below 3,000 redundancies between now and the early part of 2027.

Bloomberg Host (14:07)

And where do we stand? Do you have any kind of update right now what the banks are perspective is on of course the too big to fail regulation and some of the proposals from the Swiss government as far as capital requirements.

Sergio Ermotti (14:19)

Well, this is really an important steps together with finishing the integration. I think that I just mentioned, you know the process of completing the integration and finalizing this very big work. Because of course that is also painful because as I mentioned we need to take also go through redundancies. But what we want to set is the scene for growth to be able to, you know, to hire again and growth. And in that sense in order to be able to growth, we have. We need a competitive regulatory framework.

Bloomberg Host (14:53)

Right.

Sergio Ermotti (14:53)

And what we, we, we fully understand the necessity of taking the lessons learned from what happened at Credit Suisse, but we believe that the current proposals are not really reflecting what happened at Credit Suisse and are going too far. And therefore we are contrib in the debate with our views on the matter. And. But this is now a political process. We hope we're going to get more clarity in the second. By the second half of the year.

Bloomberg Host (15:21)

Second half of the year. Are there compromises that you would potentially accept and that conditions of doing business? Is, is it a hindrance obviously to be still domiciled in Switzerland?

Sergio Ermotti (15:33)

Look, you know, first of all, there is a compromise is usually between two people, you know, negotiating something we are not in A negotiation is a political process and therefore we need to see what's coming out. As I said, our role right now is to make sure on behalf of our shareholders, our employees, our clients and in general to the public that we contribute our views on the matter. But you know, we want, we are, we are a Swiss bank. We are very proud to be a Swiss bank. Is a, we believe that is, is a, is a, is a differentiating factor. We believe this is good for Switzerland and we want to continue to operate as a Swiss banker going forward.

Bloomberg Host (16:18)

So it's not necessarily a compromise because as you said, that would be a negotiation. Right. But are you confident that they will come up and there will be a resolution that will be acceptable to ubs?

Sergio Ermotti (16:31)

I cannot be confident about that. I think that I'm, I'm pleased to see that there is a political interest to go deeper and fully understand the details of this. It's very important to understand the details of what's going on. So such an important decision cannot be taken out of emotions or by people trying to drive the agenda by fear.

Bloomberg Host (17:00)

How would you. What are your opportunities? Do you see in the United States? Obviously your chairman has talked to Scott Bessen those massive market rumors that was possibly about discussing moving to the United States. But we also know that Mr. Kelleher wants to boost a wealth management in the United States. What are the opportunities there?

Sergio Ermotti (17:20)

Well, first of all, I have to say we are in regular dialogue with many key stakeholders around the world in government's regulatory framework regularly. So there is nothing exceptional when we speak with one or the other officials. So. But of course the US together with this region and China are likely to continue to be two engines of growth. It's very important for us to continue to be competitive and present in the us like we want to continue to be strong in Asia and in our home country, Switzerland.

Bloomberg Host (17:55)

Sergio Ahmadi thanks so much for your time and having us here at the GCC 2026.

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