UBS CEO Ermotti Says Bank Been Holding Talks on Cost Sharing
(Bloomberg) -- UBS Group AG Chief Executive Officer Sergio Ermotti said the bank has been talking about cost-sharing initiatives with rivals.
Speaking Monday on a conference call to discuss first-quarter earnings, Ermotti said the bank is “discussing at various levels at the domestic and international front” potential co-operation, though said it would not comment “on a specific situation until things are clarified.”
Last week, people with knowledge of the matter said that UBS and Credit Suisse -- competitors in investment banking and wealth management -- are in early-stage negotiations about co-operating in areas such as compliance, settlements and trade processing. The initiative is a response to global pressure on profit margins from tighter regulation and low interest rates.
The people asked not to be identified because the matter is private.
Ermotti said recently that banks can no longer afford separate back-office functions because of such pressures on margins. His Credit Suisse counterpart, Tidjane Thiam, said in 2016 that his firm was in talks with another lender, which he didn’t identify, about sharing databases and servers.
In Switzerland, banks have also held talks in recent years with the stock exchange, which is owned by the lenders, with a view to sharing back-office functions on a larger scale.
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