To spin-off, or not to spin-off ?
Bloomberg News reports that UBS Chief Executive Officer Sergio Ermotti has denied speculation that the bank will spin off its investment-banking business to meet regulators’ demands for holding more capital.
'We are not considering that option', Ermotti, 53, said in an interview with Stephen Engle on Bloomberg Television in Shanghai Monday. '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'.
Ermotti refuted a report by Mediobanca SA analysts last week that UBS may dispose of the investment-banking business as higher capital requirements from regulators thwart efforts to boost returns.
'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'.
Hit the link below to access the complete Bloomberg article:
image: © Tony Hall