ZURICH (Reuters) – UBS’s (UBSG.S) most senior managers will each contribute the equivalent of three months’ salary to fight the new coronavirus, Chief Executive Sergio Ermotti said on Thursday, as he cautioned over hopes for a swift recovery from the economic downturn caused by the epidemic.
FILE PHOTO: Swiss bank UBS CEO Sergio Ermotti addresses a news conference in Zurich, Switzerland February 20, 2020. REUTERS/Arnd Wiegmann/File Photo
Ermotti has personally had contributed 1 million Swiss francs ($1.03 million) to efforts in his home canton of Ticino, which has suffered the brunt of the outbreak in Switzerland.
The 13 members of UBS Group’s executive board will also make dig deep into their pockets to help out.
“My colleagues on the management board have already committed to donating 50% of their next six months fixed salaries for causes related to COVID,” Ermotti said on Thursday.
“We are always united, and everyone tries to do what is possible to be done in this very difficult environment,” he told Bloomberg TV.
UBS executives received just over 28 million Swiss francs in base salary in 2019, or just over 7 million francs in three months’ pay.
Earlier the bank announced plans to suspend half its 2019 dividend payment until later in the year following a request from Switzerland’s financial markets supervisor FINMA.
Ermotti, who is due to be replaced by Ralph Hamers who previously led Dutch bank ING (INGA.AS) in November, said it was too early to make predictions over its 2020 dividend.
“We’re going to think prudently about our desire to keep a very strong capital position and also serve our clients and lend where appropriate and necessary,” Ermotti said. “But also we will take into consideration the needs of our shareholders in terms of capital returns.”
UBS also said it expected to see a first-quarter profit rise to about $1.5 billion.
All of the bank’s businesses, which include the world’s biggest wealth management operations, investment banking and asset management, as well as a Swiss-focused retail and corporate banking business, had done well in the first quarter, Ermotti said.
The Swiss native who has led UBS since 2011 cautioned about investing in equities, saying it was currently too difficult to forecast how the markets would develop.
“It is good to see the market rebounding,” he said, noting expectations for a recovery in the coming months.
“There is downside risk to that scenario. In that sense I would be careful about too much exposure to equities at this stage.”
Reporting by John Revill and Brenna Hughes Neghaiwi