UBS’ Chief Ermotti and Senior Managers Promise to Donate Millions to Fight Coronavirus

A Swiss investment bank, UBS Group AG or UBS is gearing up to consolidate millions of cash donated from the executive members of the company to fight the coronavirus outbreak that has downturned the global economy.

The outgoing UBS chief, Sergio Ermotti said on Thursday, April 9, 2020, that each most senior managers including him would contribute a pool of donation which would be equivalent of their three months’ salary despite he warned to be cautious over hopes for a swift recovery of the economic downturn caused by the epidemic.

Executives’ Donation Contributions

Earlier, Ermotti had contributed 1 million Swiss francs ($1.03 million) to fight the virus outbreak in his hometown in the canton of Ticino, one of the places where the COVID-19 has hit hard in Switzerland. Apart from the CEO, as many as 13 senior members of UBS Group’s executive board would contribute their shares of income to help in addressing many issues related to the virus pandemic in the country.

Ermotti said on Thursday in a statement, “My colleagues on the management board have already committed to donating 50% of their next six months fixed salaries for causes related to COVID.” Speaking to Bloomberg TV, he made a remark, “We are always united, and everyone tries to do what is possible to be done in this very difficult environment.”

A source explained that UBS executives’ base salary in 2019 was estimated to be more than 28 million Swiss, which was nearly over 7 million francs in three months’ pay. Ermotti exclaimed, “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… But also we will take into consideration the needs of our shareholders in terms of capital returns.”

Precautions on Equity Investment

Ermotti, who is going to be replaced soon by Ralph Hamers who previously led Dutch bank ING in November, said it was yet too early to predict over its 2020 dividend. Earlier, the bank announced that it would suspend half its 2019 dividend payment until later in the year due to a request from Switzerland’s financial markets supervisor FINMA.

It was projected that UBS estimated a surge of its first-quarter (Q1) profit to about $1.5 billion. Ermotti explained that the key operations of the bank, including the wealth management operations, investment banking, and asset management, as well as Swiss-focused retail, and corporate banking business, had done well in the Q1.

Nevertheless, the outgoing CEO, who has led UBS since 2011, warned about making an investment in equities, saying that the fallout of the virus outbreak on the global market is now yet uncertain. The native Swiss also said, “It is good to see the market rebounding,” adding that a swift recovery is less likely to happen in the coming months. He warned, “There is downside risk to that scenario. In that sense, I would be careful about too much exposure to equities at this stage.”

I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.

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