UBS CEO Discusses Future After Credit Suisse Merger

UBS Group AG is focusing on future technological advancements as it integrates Credit Suisse following its rescue takeover 18 months ago, according to CEO Sergio Ermotti. At an Institute of International Finance conference, Ermotti emphasized the need for the bank to adapt to significant industry changes expected in the next five to ten years for increased efficiency and enhanced client service. Despite recent cost-cutting measures, UBS expects moderation in its third-quarter earnings due to the complexities involved in merging the two banks' operations, including a significant reduction in IT applications from 3,000 to 300. Meanwhile, UBS maintains a cautious outlook on the US dollar, predicting a downturn despite its recent strength, largely due to concerns over the US federal deficit and potential inflationary pressures. In contrast, major US banks are thriving, outperforming earnings expectations and finding opportunities for profit in investment banking and lending, which poses a dilemma for UBS as it seeks to balance growth and risk. As UBS navigates these challenges, it is also learning lessons from the Credit Suisse saga, particularly regarding the importance of maintaining liquid balance sheets to mitigate reputational risks.