UBS’s Weber says reducing $5bn French fine is priority

Bloomberg

UBS Group AG Chairman Axel Weber said his top priority for the next months is working to reduce a $5 billion French tax fine that’s prompted the bank to postpone a decision on future share buybacks until the second half of the year.
The Swiss lender was slapped with the fine after a Paris court found it guilty of helping wealthy French clients stash undeclared funds in Swiss accounts, a decision that depressed the bank’s share price. The case is set for retrial in June and the bank hasn’t set aside significant provisions for a fine.
“We have a laser focus on the French trial,” Weber said in an interview with Bloomberg TV on Wednesday at the World Economic Forum in Davos, Switzerland. “That’s best thing we can do for shareholders in the first half of this year.”
The bank slashed financial targets, including for profit, cost efficiency and dividend growth, as Europe’s negative interest rates continue to weigh on lenders in the region. With a 2 billion-franc buyback program wrapping up this summer, Chief Executive Officer Sergio Ermotti said any capital return will be assessed from there on.
Turning to the bank’s plans in the US, the Swiss lender is seeking to build its market share with a focus on wealth management and a goal of breaking into the top four in the country. Still, he acknowledged that UBS can’t compete with large American firms in wholesale banking. “We want to improve our position and close the gap with the US banks,” said Weber. “But we still need to build that top segment for which we are known.”
The chairman also said he wants to improve efficiency at the wealth unit but spending will be difficult to bring down due to compensation for its key client advisers.