UBS's Ermotti Sees More Bank Consolidation in 2020

The video discusses the cost income ratio in banking, highlighting its misleading nature and the importance of capital efficiency. It covers the impact of the French case on capital return policies and the potential for consolidation in the European banking sector. The discussion emphasizes the importance of scale in banking to offset margin compression and enhance client and shareholder value.

What is the main reason the bank considers the cost-income ratio to be misleading?

• It overestimates the bank's tangible book value.

• It ignores the bank's commercial banking business.

• It is not a true indicator of inefficiency.

• It does not account for regulatory capital.

How does the bank plan to handle its capital return policy in light of the French case?

• By increasing dividends significantly.

• By investing in new business ventures.

• By halting all share buybacks.

• By buying back more than half of last year's shares.

What is expected to be a significant factor in European banking consolidation?

• The implementation of Basel III and IV rules.

• The rise of digital banking platforms.

• The increase in interest rates.

• The decline in customer deposits.

Why is scale considered important in the banking industry?

• It helps in reducing regulatory scrutiny.

• It allows for better customer service.

• It enables offsetting margin compression and delivering savings.

• It increases the number of branches.

What is the bank's stance on participating in consolidation?

• It is actively seeking mergers.

• It is not interested in consolidation.

• It considers potential combinations that create value.

• It plans to acquire smaller banks.