UBS told to tone down lobbying in row with Swiss government

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UBS has been told to tone down its lobbying campaign in the row with the Swiss government over capital reforms, even as the lender explores plans to extend its chief executive’s tenure beyond next year.

Switzerland’s largest bank has been at odds with the government for nearly two years over plans to force it to increase its capital requirements by up to $26bn. But the government’s stance has hardened in recent weeks, with the finance minister rejecting a key compromise proposal.

Lawmakers have warned UBS to reduce the public profile of chief executive Sergio Ermotti in opposing the changes, two people familiar with the matter said. “A large part of parliament actually agrees with the bank [on a key point of contention] but we have told them that their lobbying and particularly statements by Ermotti are not helpful right now,” said one of the lawmakers.

Another parliamentarian in Switzerland’s upper house said they had privately advised the bank to “reconsider its lobbying campaign”, particularly as the relationship between the bank’s management and Switzerland’s finance minister Karin Keller-Sutter has deteriorated.

A set of compromise proposals for capital reform presented by a cross-party group of Swiss politicians in December had been seen as a potential breakthrough for the bank.

However, Keller-Sutter rejected the compromise proposals, which recommended considerably watering down the government’s original plans, dashing hopes that the two sides could find a workable solution.

The shift in the government’s position has forced UBS to revisit its succession planning, with the bank’s board in talks with Ermotti about staying beyond next year, according to people familiar with the matter.

Ermotti, who returned to run UBS in 2023 following its state-orchestrated takeover of Credit Suisse, had intended to step down as chief executive in April 2027, once the integration of the two lenders was complete, the FT reported in January.

Ermotti, who is 65, previously said he would lead the bank until “at least” late 2026 or early 2027, without setting a specific date.

But UBS’s board of directors is now open to Ermotti extending his tenure further so he can lead it until there is more certainty about its future capital position, the people said. He has yet to make a final decision about whether he stays beyond April 2027, the people added.

Swiss newspaper NZZ was first to report that UBS was exploring extending Ermotti’s tenure.

The bank’s board has lined up a handful of potential successors to Ermotti, including wealth management co-heads Iqbal Khan and Robert Karofsky; asset management chief Aleksandar Ivanovic and chief operating officer Bea Martin.

One person familiar with UBS’s lobbying efforts said lowering Ermotti’s public profile was not something the bank would consider.

UBS said Ermotti would “remain Group CEO until at least early 2027”, adding: “with the integration only being substantially complete at the end of 2026, as planned, and important work ahead to ready the bank for the next phase of its strategy and growth trajectory, it is premature to speculate about the timing of Sergio stepping down”.

“When the time comes to decide on a successor, the board will be able to draw on a strong bench of internal candidates, but will of course fulfil its fiduciary duty by also evaluating external candidates,” the bank said.