ZURICH (Reuters) – UBS Chief Executive Sergio Ermotti joined other banking executives on Tuesday in declaring consolidation of the European sector “inevitable”, declining comment on whether Switzerland’s biggest bank plans to participate.
“Of course, I will abstain to talk about UBS,” Ermotti said at the virtual Bank of America Merrill Lynch Annual Financials CEO Conference.
“But…you heard me say, particularly in the last year or two years, I felt the debate in Europe was too focused on ‘too big to fail’, and rather should have been ‘too small to survive, to small to compete.’ Now, I think, already since late (2019), and since COVID, things are crystal clear. As I mentioned a few quarters ago, the train left the station in that sense, and consolidation is inevitable.”
Ermotti, due to be replaced by former ING head Ralph Hamers in November, said regulators had been vocal in the last few months about their openness to consolidation that made sense, adding they were right to oppose deals that did not add value.
Reports that UBS has examined a potential tie-up with rival Credit Suisse have put it in the spotlight of late.
At the same conference on Tuesday, the head of Credit Suisse said he also expected to see more deals.
Ermotti said that while consolidation would be good for the market, deals needed to be sensible.
“Scale per se means nothing. You need to have focused scale, complementary scale, where you create added value,” he said.
(Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields)
