UBS CEO Ermotti steps up warnings on risk of excessive regulation

By Ariane Luthi

BUERGENSTOCK, Switzerland (Reuters) -UBS CEO Sergio Ermotti said on Monday that stricter regulation in the Swiss banking sector would benefit foreign competitors as he stepped up warnings on the risks of saddling the country's largest bank with excessive capital requirements.

UBS is awaiting details of the Swiss government's plan to make the banking sector safer, following the demise of Credit Suisse, which UBS acquired in 2023 after its longstanding rival collapsed following a string of scandals.

The government wants to make UBS hold more capital to make it more robust. UBS executives say excessive capital requirements will make it harder to compete and could threaten the attractiveness of Switzerland's financial sector.

Speaking at the Digital Gipfel Schweiz 2025 event at the Buergenstock resort overlooking Lake Lucerne, Ermotti said incoming Swiss regulation could have serious repercussions.

"The only thing I know that out of this debate, if it goes (through), there's not going to be a winner in Switzerland. The winners will be our competitors outside Switzerland," he said, forecasting that they would be celebrating.

At the heart of the debate are proposals by Swiss authorities to make UBS fully capitalize its foreign units, though it remains to be seen how many billions of dollars in additional capital UBS may need to hold.

"I mean, the top end of the debate is 20 plus 20, I would call it, rather more than 40 billion of additional capital, which of course, is not something that we can bear in terms of (remaining) a competitive global bank," Ermotti said.

"So we are looking at what's going on. At the end of the day, the parliament should make a decision."

Ermotti said Switzerland needs a level playing field for corporate implementation of new technology and that UBS wants to be at the forefront of this drive.

(Reporting by Ariane LuthiEditing by Dave Graham)