Q3 2024 UBS Group AG Earnings Call - Media Conference
Rachel Smith: Good morning. Welcome to our Q3 Earnings Media Call. We're joined, as usual, by our Group CEO, Sergio Ermotti, and our Group CFO, Todd Tuckner. Hopefully, you have all taken advantage of listening to the analyst call and reading through our materials that have been published this morning, so we're going to go straight to Q&A. Operator, I'll turn it over to you.
Good morning, welcome to our third quarter earnings media call were joined as usual by our group CEO, Sergio Almaty, and our group CFO Todd techno.
Hopefully you have all taken advantage of listening to the analyst call and reading through our materials that have been published this morning. So we're going to go straight to Q&A. So operator, I'll turn it over to you.
Operator 2: Media representatives wishing to ask a question may now press star and one. The first question is from Johannes Ritter from FAZ. Please go ahead.
Speaker Change: Media Representatives wishing to ask a question May now press Star and one the first question is from Johan <unk> Richter from <unk>. Please go ahead.
Johannes Ritter: Good morning. Thank you. I'd like to come back to the latest decision of FINMA. FINMA has ordered UBS to revise and improve its stabilization and emergency plan. Came this as a surprise to you and what are the main tasks that you have to fulfill now? Secondly, you were always in favor of consolidation in the European banking sector. I wonder, what do you think of the plans of UniCredit to take over Commerzbank?
Johan Richter: Good morning, Thank you.
Johan Richter: I'd like to come back to the latest.
Johan Richter: FINMA FINMA has all that UBS to revise and improve its sterilization of emergency plan.
Speaker Change: Jim This is a surprise to you and one of the main tasks that you have to consider now and secondly, you were always in favor of consolidations in the European banking sector. So I wonder what do you think of the plants of Unicredit to take overcome matchbox.
Sergio Ermotti: Well, thank you. No, the report of FINMA was not a surprise because they have to issue a report. Last year, they decided not to publish a recovery and resolution plan assessment for UBS because of the acquisition of Credit Suisse, and this year they published one. We are 100% aligned with FINMA on this topic. Yes. In that sense, we are working hard because it's our first priority, is really to demonstrate that UBS, in the unlikely event something happen, is resolvable without the taxpayer having to incur any losses or us creating any collateral damage to the economy or the system. We are very aligned, and we are now going through the necessary changes of our current resolution plan because, of course, that was made before the acquisition of Credit Suisse. Now we have to combine and include the new operations.
Speaker Change: Well, thank you Noah.
Speaker Change: The report of FINMA was not a surprise because they have to issue a report last year. They are.
Speaker Change: I decided not to publish our recovery and resolution plan assessment for UBS because of.
Speaker Change: The acquisition of credit Suisse in D C or are they publish one we are 100% aligned with FINMA on this topic.
Speaker Change: On this topic, yes.
Speaker Change: And in that sense that we are working hard because he is our first.
Speaker Change: Priority is really to demonstrate that.
Speaker Change: UBS in the unlikely event, some things happen is resolvable without.
Speaker Change: The taxpayer having to incur any losses or Asa creating any.
Speaker Change: Uh huh.
Speaker Change: Collateral damage to the economy of our the system. So.
So we are very aligned and we are we are now going through the necessary changes of our current our resolution plan because of course that was made before the acquisition of credit Suisse. Now we have to combine and include a new operations, but I believe we're going to be able to demonstrate to buy the next assess.
Sergio Ermotti: I believe we're going to be able to demonstrate by the next assessment that we are addressing all the open items. In respect of a consolidation, I'm not going to comment on specific transactions for obvious reasons. I do think that it's time that consolidation happen. I think that there are different consolidations. They may be only domestic or maybe cross-border consolidation. I do believe the fact that we don't have a capital market union, makes it even more desirable to have stronger banks that can help the European economy to flourish again and to make all the investment and sustain granting credits to the economy, as I said. I think that it's very important that the banking union at least works where there is industrial logic for consolidation and that there is no national impediments in preventing that.
Speaker Change: Meant that said we are addressing all the open items.
So irrespective of consolidation I am not going to comment on that on on specific transactions for.
Speaker Change: Obvious reason.
I do think that.
Speaker Change: It's a it's a time that consolidation happened I think that there are different consolidations. They may be only domestic or maybe cross border consolidation I do believe that said without.
Speaker Change: A proper Ah Ah the fact that we don't have a capital market Union.
Speaker Change: <unk> makes it even more desirable to have stronger banks that can held back.
Speaker Change: The European economy to flourish again and to make all the investment and sustain at a create it's a.
Speaker Change: Yeah.
Speaker Change:
Speaker Change: The granting credits.
Speaker Change: Due to the economy as I say so.
Speaker Change: So I think that's a.
No.
Speaker Change: It's very important that Seth.
Speaker Change: The banking Union at least works, where there is industrial logic for for consolidation and that there is no national impediments.
Speaker Change: In our in preventing that said I think that Seth if if consolidation in the European banking is not happening happening because of parochial national interest no matter, which country is involved that would be a bad chapter for Europe and totally contradicting at also.
Sergio Ermotti: I think that if consolidation in European banking is not happening because of parochial national interests, no matter which country is involved, that would be a bad chapter for Europe and totally contradicting also the most recent desire of Europe to have a more unified view of the world.
Speaker Change: Most of the incentive.
Speaker Change: Desire of Europe too.
Speaker Change: And our board will be slight view of the ward so.
Johannes Ritter: Mm-hmm. Okay, one quick follow-up on that. Specifically sorry, you must have analyzed what such a takeover would mean for UBS's position in important markets. How does this analysis look like?
Speaker Change: Okay.
Quick follow up on that.
Speaker Change: Specifically.
Speaker Change: Alright, you must have analyzed what starts to take over would mean for UBS is positioned in important markets.
Speaker Change: So how this has this analysis.
Analysis looks like.
Speaker Change: Uh huh.
Alright.
Sergio Ermotti: We haven't overanalyzed that one. I don't think it's very relevant to our strategy, to be honest. I think that it's not appropriate for me to comment on this transaction. I prefer not to say anything on that.
Speaker Change: We havent Overanalyze that one I don't think is very relevant to our strategy to be honest so but.
Speaker Change: I think it set it said I think that says you know.
Speaker Change: It's not appropriate for me to comment on this transaction.
So.
Speaker Change: We I prefer not to not to to say anything on that.
Johannes Ritter: Okay. Thank you.
Speaker Change: Okay. Thank you.
Operator 2: The next question is from Simon Song from AWP Finanznachrichten. Please go ahead.
Speaker Change: The next question is from Samsung Young from AWP. Please go ahead.
Simon Song: Yes, please. Good morning. Regarding the migration of the Credit Suisse clients in Switzerland in Q2 2025, I would like to know how long will this process take, and also, is it true that the migration in Switzerland will release the biggest chunk of cost savings regarding the IT migration? I mean, in comparison to other regions. Third question is in regards of headcounts. Full-time equivalents decreased a little in Q3. Is this to be expected to similarly stable, or could we even see an increase in the coming quarters? In the current Q4 and also in Q1 and Q2 next year, since you need labor for the ongoing integration works regarding the IT migration, et cetera. Thank you.
Speaker Change: Thanks, Good morning regarding the migration of the credit Suisse client in Switzerland in the second quarter.
Speaker Change: 2025, I would like to know how long will this process take and also is it true that the migration in Switzerland, and released the biggest chunk of cost savings regarding the I T migration I mean, it in comparison to other regions.
Speaker Change: And that question is in regards of head Toms.
Full time equivalents decreased a little hint that in the third quarter and it is to be expected to similarly stable or could we even see an increase in the coming quarters. So in the current fourth quarter net loss in the first and second quarter next year since a neat.
Speaker Change: For the ongoing integration works regarding the IP migration et cetera. Thank you.
Speaker Change: Yeah.
Sergio Ermotti: On the migration, I think that it's clear that when you look at the vast majority of the clients, we are migrating around 1.2 million clients. I think that 1 million or so is Swiss related. It will start, as you mentioned, in Q2 2025. We expect this to last until Q1 2026. It's going to happen in four waves. This is really clearly something that we'll need the support of many people. The fact that we are still running to GC banks, although we are optimizing post the parent bank merger, some aspect of there is still a lot of people involved in managing the platforms and the infrastructure of the Credit Suisse situation. Todd, why don't you take the second?
Speaker Change: So on an a on the migration I think that it's clear that sad when you look at the vast majority of the clients are are we we are migrating around one 2 million clients I think that's.
Speaker Change: A million or so is Swiss related.
Speaker Change: And.
Speaker Change: It will start as you mentioned in the second quarter of 2025, we expect this to last until the first quarter of 2026 is going to happen in <unk>.
For waves.
Speaker Change: And.
Speaker Change: And.
Speaker Change: And this is this is really clearly some things that we need.
Speaker Change: The support of many people so the factor we are still running too.
Speaker Change: The banks through D C, but banks too.
Speaker Change: Although we are optimizing pulse the parent bank merger some aspect of.
Speaker Change: There is still a lot of.
Speaker Change: Of people involved in managing the platforms and infrastructure of decrease with situations that Todd why don't you take the second.
Todd Tuckner: Yeah. Hi. In terms of the cost takeout, I would say just the sheer magnitude of the Swiss migration is the most significant, just of course, by dint of the number of clients impacted, but also the size of the platform. From a technology perspective, if you look at the relative technology costs associated with the various milestones, for sure, getting to the back end of the Swiss migration is the most relevant driver of cost takeout from a technology standpoint, which is going to be a big driver of overall costs that we need to remove over the next two years. Look, in terms of headcount, I won't comment specifically on headcount other than to say that, of course, headcount reductions are part of the cost takeout.
Speaker Change: Yeah, Hi.
Speaker Change: Yes in terms of the cost takeout I would say, it's just the sheer magnitude of the Swiss migration is the most significant just of course by.
Speaker Change: It didn't have the number of clients impacted but also the size of the the.
Speaker Change: The platform so from a technology perspective, if you look at the relative technology costs associated.
Speaker Change: Associated with the various milestones for sure getting to the backend of the Swiss migration is the most relevant.
Speaker Change: Driver of cost takeout from a technology standpoint, which is going to be a big driver of overall costs.
Speaker Change: That we need to remove over the next two years and then.
Speaker Change: Look in terms of head count.
Speaker Change: I won't comment specifically on on head count other than to say that.
Speaker Change:
Speaker Change: Hum.
Speaker Change: Of course head count reductions are part of.
Speaker Change: The cost takeout, it's just natural that if we're going to have $13 billion of gross cost saves.
Todd Tuckner: It's just natural that if we're going to have $13 billion of gross cost saves, that there will be headcount associated with that, in addition to, of course, technology and real estate and third-party spend and all the other cost categories. We expect that the headcount trajectory will come down over time. It won't be a straight line. It's got dependencies, including, of course, the Swiss migration and the application decommissioning in relation to that. Of course, the costs are not going to be always smooth, but because of the dependencies, you may see more chunky costs that come out in a quarter versus others. In relation to that, you'll see headcount reductions also behaving on a similar trajectory.
Speaker Change: But there will be head count associated with that in addition to of course technical.
Speaker Change: Technology, and real estate and third party spend and all the other cost categories, we expect that.
Speaker Change: The head count trajectory will.
Speaker Change: Will will come down over time, it wont be a straight line.
Speaker Change: Dependencies, including of course the.
Speaker Change: The Swiss migration in the application decommissioning.
Speaker Change: In relation to that.
Speaker Change: And of course, it's also going to be a cotton costs are not going to be you know always.
Speaker Change: Always smooth, but because of the dependencies you may see.
Speaker Change: You know more chunky costs that come out in the quarter versus others. So.
Speaker Change: And in relation to that.
Speaker Change: You'll see head count reductions also behaving.
On a similar trajectory.
Operator 2: Thank you. The next question is from Noelle Ilyan from Bloomberg. Please go ahead.
Thank you.
Speaker Change: The next question is from <unk> <unk> from Bloomberg. Please go ahead.
Noelle Ilyan: Good morning. I just got two questions. Firstly, other banks, including Intesa and BPER Banca, have recently announced job cuts citing AI. Do you expect your own deployment of AI to be able to bring you similar headcount savings? The second question on share buybacks. Previously, you said in 2026, you'd be looking to exceed full year 2022 levels. Now you're saying buyback ambitions for 2026 are subject to Swiss regulation. Should we be reading anything into that change of language? Thank you.
Speaker Change: Good morning, I've, just got two questions firstly other banks, including <unk> have recently announced job cuts Hyping AI do you expect your own deployment of AI to be able to bring you similar headcount savings.
Speaker Change: And the second question on share buybacks previously set in 2026 you'd be looking to exceed full year 2022 levels now, you're saying buyback ambition for 2026 subjects with regulation should we be reading anything into that change of language. Thank you.
Sergio Ermotti: Well, absolutely. If you go back to our statement, there is zero change in language in respect of our buyback plans. We always clearly outlined that our capital return policy for 2025 and 2026 would be subject to developments on the regulatory front. It's fair to say that by now we won't have any developments in 2025 because the timing of the consultation will go definitely into 2025, and no new rules will be defined before that. Therefore, in 2025, we can easily say that we can continue with the execution of our own ambition for 2026. It's an ambition that is subject to the same caveat we announced a year ago. Zero change in our language. In respect of the headcount- topic.
Speaker Change: Well, absolutely if you go back.
Speaker Change: Two our statement there is zero change in language.
Speaker Change: In respect of our buyback plans, we always clearly outlined at our capital return policy floor 25.
Speaker Change: In 2026 would be subject to developments on the regulatory front. So it's fair to say that by now we want to have any developments in 2025, because the timing of the consultation we'd go definitely into 2025, and then no new rules will be defined before that sort of <unk>.
Speaker Change: In 2025, we can easily say that we can continue with our own.
Speaker Change: Ah the execution of our own ambition for 2026 at <unk>.
It's an ambition that is subject to the same caveat, we announced a year ago. So.
Speaker Change: Zero change in our.
Speaker Change: Our language.
Speaker Change: In respect of the at count at.
Sergio Ermotti: I think that, of course, as we outlined, AI and new technology will, as we saw in the last 30, 40 years in our industry, will bring efficiencies and enhance productivity. This is not going to be something that will happen overnight. People have to embrace new ways of working and new ways of operate. As we do that, we do also headcount and resource planning. We believe that natural attrition over the years will give plenty of opportunity to address this topic without having to take proactive actions.
Speaker Change: Topic, I think that of course as we outline.
Speaker Change: <unk> AI and new technology will.
Speaker Change: As we saw in the last 30 40 years in our industry will bring efficiencies and <unk>.
Speaker Change: And they announced productivity but.
Speaker Change: This is not going to be something that will happen overnight. So people have to embrace new ways of working and new ways of operator and as we do that we do also had come out at counted resource planning, we believe that's a.
Speaker Change: Natural attrition over.
Speaker Change: Over the years that will give us plenty of opportunity to address this topic without having to take proactive actions.
Rachel Smith: Thank you.
Speaker Change: Thank you.
Operator 2: The next question is from Daniel Zullau, from Börsen-Zeitung. Please go ahead.
Speaker Change: The next question is from Daniel Zulauf from Burleson Sytem. Please go ahead.
Daniel Zullau: Yes, good morning. One question. You are seeing the industrial logic in the further consolidation of the European banking market. One element of such consolidation, usually, at least in my experience, is that parallel to the emergence of large entities, there is also a trend of disintermediation and a trend of specialization in industries. Do you expect that the banking industry is going to specialize further in the longer future? In which direction do you think this could go?
Speaker Change: Yes, good morning.
Speaker Change: One question, you're seeing the industrial logic and the for deconsolidation of the European banking market.
Speaker Change: One <unk>.
Speaker Change: Element of such.
Speaker Change: Consolidation usually.
Speaker Change: At least in my experience is that.
Speaker Change: Pedal too.
Speaker Change: The emergence of larger entities there is also.
Speaker Change: A trend of dis intermediation and trend of specialization in industries.
Speaker Change: You expect that.
Speaker Change: The banking industry.
Speaker Change: He's going to specialize.
Speaker Change: During the longer future.
Speaker Change: And in which direction do you think this could go.
Speaker Change: Yeah.
Sergio Ermotti: Well, I think that by its nature, you have over the years, a new way of doing business. Technology has driven also a lot of changes in our industry in the last 20 years or so. I think that by definition, technology and regulation will also change the way banks act. In a sense, the need of consolidation may be reinforced by some of the trends we see. For example, the development of private credit markets. It's definitely a consequence of the fact that banks are more and more regulated, and the needs of the economy needs to go and find new places where to fund. We do believe this can be good and constructive and complementary to banking models, but also it can create undesired risks.
Speaker Change: Well I think that set by by its nature.
Speaker Change: You have that over the years said.
Speaker Change: New way of doing business that technology has driven also a lot of changes in our industry in the last 20 years or so so I think that's by definition.
Speaker Change: Technology regulation and regulation that will also change the way Banks Act.
Speaker Change: So in a sense.
Speaker Change: The need of consolidation.
Speaker Change: May be it may be a reinforced by some of the trends that we see.
Speaker Change: For example, the development of private credit markets are at.
Speaker Change: It's definitely a consequence of the.
Speaker Change: The fact that banks are more and more regulated and.
Speaker Change: The needs of the economy needs to go and find new places where to fund.
Speaker Change: We do believe this is can be good and constructive fat and complementary add to our banking models, but also it can create undesirable.
Speaker Change: Risks so.
Sergio Ermotti: I don't think that banks will be specialized per se, but of course, they will need to find different ways to operate. Creating critical mass and scale in core businesses helps to maintain strong and sustainable business models that are necessary in banking, and particularly when you face such a disintermediation by new player or non-regulated players.
Speaker Change: I don't think that banks will be specialized per se but of course.
Speaker Change: They will need to find a different ways to operate so creating critical mass.
Speaker Change: Scalar has scale in core businesses Alps due.
Speaker Change:
Speaker Change: To maintain a strong and sustainable business models that are necessary in banking and particularly when you face is such a.
Speaker Change: These intermediation by new player or nonregulated players.
Daniel Zullau: Thank you.
Speaker Change: Thank you.
Operator 2: The next question is from Nathalie Olof-Ors from AFP. Please go ahead. Ms. Olof-Ors, we cannot hear you.
Speaker Change: The next question is from Natalie <unk> from HSBC. Please go ahead.
Speaker Change: With all of ours, So we cannot hear you.
Speaker Change: Michelle.
Nathalie Olof-Ors: Can you hear me now?
Speaker Change: Can you hear me.
Operator 2: We can hear you now.
Speaker Change: We can hear you now.
Nathalie Olof-Ors: Oh, good. I would like to come back to the American election. That's one of the risks you flagged in your statements. At this point, nobody has absolutely no clue as to what's going to happen next week. Can you let us know what you're seeing so far, and what you're putting in place to help your clients, whatever the outcome of the election will be?
Speaker Change: Yes.
Speaker Change: I would like to come back to the energy, that's one of which two four.
Speaker Change: Yes.
Speaker Change: In Europe.
Speaker Change: At this point are you looking at.
Speaker Change: No.
Speaker Change: Next week, but can you, let us know what's yours.
Speaker Change: So far and what you're pitching in to help sure.
Speaker Change: What is it.
Speaker Change: I had come into the next year.
Sergio Ermotti: Well, what we see right now is clearly the market and the clients' activities, in terms of how they deploy, I would say, strategic, but also mainly tactical asset allocation in favoring industry that are linked to the policies that President Trump could deploy. In a sense, I think that what we are now looking at it is to say, okay, assess what is the risk associated with this Trump elections not coming through, and what it means for a potential rotation in the asset allocation. We are preparing for that kind of scenarios. We help clients to think about the pros and cons and how to position themselves into that situation. It's a very complex outcome. I mentioned this morning that this is not going to be an uneventful election, no matter how you look at matters.
Speaker Change: Well, what we what we see right now is clearly the market and the clients.
Speaker Change: It is there in terms of holiday.
Yeah.
Speaker Change: Deploy app.
Speaker Change: I would say.
Speaker Change: Strategic but also mainly tactical asset allocation in favoring industry that.
Speaker Change: Are linked to the policies that are.
Speaker Change: President Trump could could could deploy so.
Speaker Change: <unk>.
Speaker Change: I think that what we are.
Speaker Change: What we are now looking at it is to say, okay I assess.
Speaker Change: What is the risk associated with it.
Speaker Change: This thrump diarrhea elections, not going coming through and what it means for a potential.
Speaker Change: Rotation in the Mds at our India asset allocation.
Speaker Change: And so we are preparing for that kind of scenarios, we our clients to think about the pros and cons and how to position themselves into into that situation. So it is a very complex.
Speaker Change: Outcome I mentioned this morning that this is not going to be an uneventful election, no matter, how you look at matters.
Sergio Ermotti: Whoever wins, there's going to be a lot of questions around then, okay, how is the Congress going to look like, in terms of composition? Is there any other aspect of the elections that will need to be considered in creating short-term uncertainties? Will the election be contested, yes or no? What are the geopolitical ramifications of a new president coming in? That could then lead into a broader macroeconomic development. I do expect the outcome of this election's short and medium terms to create definitely some potential volatility and it's likely to affect client sentiment.
Speaker Change: Whoever wins.
It will be theres going to be a lot of questions. Around then okay. How is the Congress is going to look like.
Speaker Change: In terms of a composition how is that is there any other aspect of the elections that will need to be considered in creating a in creating a short term uncertainties.
Speaker Change: Will the election be contested yes, or no and what are the geopolitical ramification of of our new president coming in and that could then leading to a broader macroeconomic development. So I.
I do expect the outcome of these elections short and medium term so create definitely some some.
Speaker Change: Potential volatility and and it's likely to affect our client sentiment.
Rachel Smith: Thank you.
Speaker Change: Thank you.
Operator 2: The next question is from Stefania Spezzati from Reuters. Please go ahead.
Speaker Change: The next question is from Stefan is Pezzotti from Reuters. Please go ahead.
Stefania Spezzati: Hello. Hi. I have a couple of questions. I understand that you said that you're best in a technical discussion with the Swiss government over the reviewed capital requirements. Can you give us a bit more details on what those technical discussions are about and whether the Swiss government has given you more clarity on any additional capital that UBS will have to put aside? The other question is geopolitical. I was wondering whether UBS is reviewing its ESG and defense policy, considering what's happening in the Middle East, and whether it's taking any measures to prevent any reputational risk due to the conflict in Middle East. Thank you.
Speaker Change: Hello, Hi.
I had a couple of questions.
Speaker Change: I understand that you said that you bought back.
Speaker Change: Can you get this question when did we start the Manitoba.
Speaker Change: They reviewed capital requirements can you give us a bit more detail.
This does conclude discussions kind of about 10.
Speaker Change: I'm glad that you switched column and giving you more clarity on the any additional capital that UBS will have to decide.
And then the other question is would you. Please go ahead.
Speaker Change: And.
Speaker Change: We remain well that UBS.
Speaker Change: King.
Speaker Change: Yes, Ian Defense policy.
Speaker Change: Hey, Green, what's happening in the middle East.
Speaker Change: And what are you seeking any measure them too.
Speaker Change: And then can you get particularly on a risk.
Speaker Change: Hmm.
Speaker Change: Today the country can immediately.
Speaker Change: Thank you.
Sergio Ermotti: Yeah. Well, on the first one, it's very easy. I think that technical discussion are meant to clarify technical aspects that we are talking about 22 proposals that the Swiss Federal Council outlined. We are working through exactly on making sure that all parties have the same data, the same basis for any decision, and fully understand what they mean, rather than going through. This is not at all a negotiation, it's just exchanging data, exchanging assumptions. We are not yet into any phase where you get any feedback because this is, again, it's about exchanging facts.
Speaker Change: Yeah well.
Speaker Change: First one is very easy I think that technical discussion are meant to clarify.
Speaker Change: Technical aspects that we are talking about 'twenty two proposals.
Speaker Change: With federal councillor outline and so we are working through exactly on making sure that all parties have the same data the same basis for any decision.
Speaker Change: And and also and fully understand.
Speaker Change: What they mean rather than going through this is not at all a negotiation is just exchanging data exchanging.
Our assumptions and so we are not yet into any a phase where you.
Speaker Change: You get any feedback because this is again, it's about exchanging a facts not outset.
Sergio Ermotti: not views on the matter. In terms of the geopolitical situation in the Middle East, of course, we are watching carefully, both from a humanitarian standpoint of view. We hope that this situation gets resolved quickly, and in a way that is acceptable for all parties. We don't believe it's necessary to contemplate any major change or actions to be taken in respect of our positions vis-a-vis the region.
Speaker Change: Outset and held views on the matter in terms of the geopolitical situation in the Middle East of course, we are watching carefully both from a.
You mean.
Speaker Change: Monetary and standpoint of view.
Speaker Change: And so we hope that this situation.
Speaker Change: Situation gets resolved quickly.
Speaker Change: And in a in a in a way that is acceptable for all parties, but.
Speaker Change: We don't believe it's necessary to contemplate any major change or actions to be taken in respect of our positions.
Speaker Change: Vis vis.
Speaker Change: The region.
Stefania Spezzati: Mm-hmm. Okay. Thank you.
Speaker Change: Okay. Thank you.
Operator 2: The next question is from Steve Slater from IFR. Please go ahead.
Speaker Change: The next question is from Steve Slater from <unk>. Please go ahead.
Steve Slater: Morning, Sergio. I was interested in the line about artificial intelligence being used for M&A activity in the release. Can you give some color on that? Is that going to be algorithms saving work, or is it that they can spot M&A deals that humans have missed? Is it being rolled out in any other areas of capital markets or the investment bank that are of interest? Thanks.
Steve Slater: Good morning, Joe Joe I was interested in the line about artificial intelligence being used for M&A activity in the release.
Steve Slater: Can you give some color on that is that going to be.
Steve Slater: Algorithms saving work, albeit that they can spot M&A deals that humans have missed and.
Steve Slater: Is it being bought and Danielle revenues.
Steve Slater: Capital markets all of the investment bank debt interest. Thanks.
Sergio Ermotti: Yeah. I think that more than spotting deals that human haven't seen is probably helping humans to go down to the feasibility and the assessment of both the economics and other aspect of a transaction, being a positive or negative aspect. I think it's more a facilitator and is helping speeding up the process of data collections and forming a broader opinion. Human and our investment banking colleagues will still need to put their own judgment around what the output is. Again, it's more about facilitating the screening and the opportunity that can be developed.
Speaker Change: Yes, I think thats more than the spotting.
Steve Slater: Yes.
Steve Slater: Deals that you might have been seen as probably out being a few months to go down to the feasibility and.
Steve Slater: And at the assessment of both the economics and other.
Steve Slater: Pro.
Steve Slater:
Steve Slater: The other aspect of the transaction being a positive or negative aspects. So I think it's more a facilitator and he's helping speeding up the process of data collections and forming a broader opinion, so human and our investment.
Our investment banking colleagues will still need to put their own judgment around.
Steve Slater: The output is but again, it's more about facilitating the screening and <unk>.
Steve Slater: And.
Steve Slater: The opportunity that can be developed.
Steve Slater: Yes.
Operator 2: The next question is from Lukas Hässig from Inside Paradeplatz. Today's last question.
Speaker Change: The next question is from Lucas <unk> from inside the plots today's last question.
Lukas Hässig: Thank you very much. Hello together. Mr. Kelleher just said that he would step down basically 29, 30. Are there plans for you, Mr. Ermotti, that you could become his successor? The second question is, the $25 billion net new assets in Global Wealth, are you satisfied with this number? Thank you.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: So Ken just said that he would step down basically 29 30 odd airplanes for you Mr.
Speaker Change: You could see Tom's successor, and the second question is the 25 billion net new assets.
Speaker Change: <unk> are you satisfied with this number.
Speaker Change: Sure.
Sergio Ermotti: Well, I think that I'm very focused on my mandate. My mandate is to help the execution of the integration of Credit Suisse, and this is going to be something that is going to keep me busy till at the very least, the end of 2026 into 2027. By then I'm going to be 67. By 2030, I'm 70. You can draw your own conclusion. On the $25 billion, yeah, I think that they are in line with our targets of $100 billion. I think that what we have to focus in the next couple of years is not growth at any cost, but is quality of growth. We have already a very big asset base with 4+ trillion of clients' assets and 4.5 trillion of clients' assets. We don't need to grow per se. We need to look at quality.
Speaker Change: Well I think it's.
Speaker Change: I am very focused on.
Speaker Change: My mandate my mandate is to help the execution of the integration of credit Suisse and this is going to be something that is going to keep me busy.
Speaker Change: At the very least at the end of 2026 into 2027, so by Dan I'm going to be 67 by 2030 70. So you can draw your own conclusions.
Speaker Change: On that.
Speaker Change: Okay.
Speaker Change: On the 25 billions, yes, I've seen that they are in line with our targets of 500 billion. So I think that's what what we have to focus in the next couple of years is not.
Speaker Change: Growth at any cost, but it's quality of growth.
Speaker Change: Still we have already a very big.
Speaker Change: Asset based are we there.
Speaker Change: Four plus three millions of clients assets.
Speaker Change: And a $4 $5 trillions of clients assets, we don't need to grow up per say, we need to look at quality, we need to fix some of the.
Sergio Ermotti: We need to fix some of the aspect of the productivity of what we took on board from the Credit Suisse franchise, which is the vast majority is very good, but there are areas where we need to fine-tune, and that means maybe losing a little bit of assets to focus on quality. This is going to be good until 2025, and then from 2026 onwards, we do believe that we're going to grow towards probably around $50 billion a quarter, so $200 billions targets progressively as time goes by.
Aspect of the productivity of.
Speaker Change: What we took onboard from the credit Suisse franchise, which is the vast majority is very good.
Speaker Change: Areas, where we need to fine tune it and that means maybe losing a little bit of thoughts and focus on quality. So.
Speaker Change: This is going to be good for us.
Speaker Change: Until 2025, and then from 2026 onwards, we do believe that we're going to grow towards probably around.
Speaker Change: $50 billion in the quarter to under billions targets are progressively as time goes by.
Lukas Hässig: Thank you.
Speaker Change: Thank you.
Speaker Change: Okay.
Rachel Smith: Thank you. There are no more questions, so with that closes our call. Thank you for being with us today, and reach out to our media team if you have any further questions. Thank you.
Speaker Change: Thank you there are no more questions. So that may close the call. Thank you for being with us today and reach out to our media team. If you have any further questions. Thank you.
Operator 2: Ladies and gentlemen, the media Q&A session is over. You may disconnect your lines.
Ladies and gentlemen, the media Q&A session is over you may disconnect your lines.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Okay.
Speaker Change: [music].
