ZURICH Jan 13 UBS is not considering
spinning off its investment bank, its chief executive Sergio
Ermotti said on Monday, rebuffing speculation last week it may
consider such a move to quieten demands for it to put aside more
"We are not considering that option," Ermotti said,
according to comments made in an interview with Bloomberg
Television that have been confirmed by a spokesman for the bank.
"We have very defined assets and capital that we want to put
at work in the investment bank, and the business model works.
Therefore, there is no necessity for us to make changes,"
Mediobanca analysts said on Thursday the Swiss bank may be
thinking about spinning off its investment bank - and could even
resuscitate its old SG Warburg brand - to fend off demands that
it put aside yet more capital to protect private banking clients
from its investment activities.
The Swiss bank has cut 2,000 jobs of a promised 10,000 under
a three-year plan to quit fixed income trading seen by
regulators as high risk - but that has not been enough for Swiss
politicians who are considering tougher rules to curb borrowing
by it and Credit Suisse.
"The businesses that may be affected the most by a higher
leverage ratio is our mortgage portfolio, is our corporate loan
portfolio in Switzerland," Ermotti said. "To imply necessarily
that a higher leverage ratio means that the investment bank is
the one most affected is too much of a simple conclusion."
UBS has been scrutinized since its 2008 bailout by the Swiss
government, and is also under pressure from activist shareholder
Knight Vinke to dispose of its investment bank altogether. UBS
has always refused to do this on the grounds that it is a key
strategy pillar. A spokesman told Reuters on Thursday the bank's
strategy included the investment bank.
"Investment banking is very strategic for us," Ermotti said
in Monday's interview. "We have been making a lot of changes to
our strategy. The strategy is working, and is one that is
focused on supporting our clients in wealth management,
corporate and institutionals."
(Reporting by Alice Baghdjian; Editing by Louise Heavens)