UBS CEO Ermotti says 90% CET1 capital proposal is no real compromise

UBS CEO Ermotti Rejects 90% CET1 Capital Proposal as No Real Compromise

UBS CEO Criticizes Capital Proposal and Advocates for Moderate Approach

Ermotti's Stance on CET1 Capital Requirements

ZURICH, Sept 22 (Reuters) - UBS CEO Sergio Ermotti said on Tuesday a proposal to make the bank back its foreign units with 90% Common Equity Tier 1 capital instead of 100% CET1 is not really a compromise, urging the country to pursue a more moderate course.

Comparison of 90% and 100% CET1 Proposals

"The current proposal from the Federal Council at 100% and the 90% is de facto the same," Ermotti said, characterising both options as a distortion of UBS's competitive position. "We don't think that this is an acceptable outcome."

Parliamentary Vote and Alternative Proposals

The upper house of parliament is on Wednesday due to vote on new capital rules drawn up for UBS following the 2023 collapse of Credit Suisse.

Support for Parliamentary Committee Compromise

Ermotti threw his weight behind a compromise proposal agreed last month by a parliamentary committee that would allow UBS to back foreign subsidiaries with 50% CET1 capital and 50% Additional Tier 1 capital, which is cheaper to hold.

Ermotti's Rationale for the Compromise

"We believe it's a balanced way, which is costly for the bank, but still a balanced way to address the topic," he said. "It's the way to go."

UBS Third Quarter Outlook and Market Trends

Wealth Management and Investment Bank Performance

Speaking at a Bank of America event, Ermotti also said he saw broadly positive momentum for UBS's third quarter results, with transactions in wealth management up year-on-year, though not by as much as last year.

Advisory Business Fee Pools

For the investment bank, he cautioned that fee pools in the advisory business are going to be down, with UBS expected to be in line with market trends.

(Reporting by Ariane LuthiEditing by Dave Graham)