UBS's Ermotti Sanguine on Outflows as Investment Banking Outshines

The transcript discusses the FX business performance, highlighting a strong quarter due to a normalized environment and increased market share from electronic execution engines. The competitive landscape remains diverse, with no significant impact from other investment banks. Clients, particularly in the US, are maintaining stable asset allocations and increasing cash balances, indicating caution despite a constructive economic outlook. The analysis of net new money reveals seasonal effects and specific corporate outflows, but overall, the outlook remains positive with expected growth targets.

What was a key factor in the improved performance of the FX business in the second quarter?

• Decrease in market competition

• Higher interest rates

• Introduction of electronic execution engines

• Increased volatility in the market

How did US clients view the economic outlook during the period discussed?

• Pessimistic with a focus on reducing investments

• Highly optimistic with aggressive portfolio changes

• Optimistic but maintaining stable asset allocations

• Indifferent with no significant changes

What was the trend in cash balances among clients compared to the third quarter of 2017?

• Remained the same

• Decreased by 5%

• Increased by 5%

• Fluctuated significantly

What was one of the reasons for the outflows affecting net new money in the quarter?

• High-margin business transfers

• Tax outflows in the US

• Increased lending activities

• Significant market downturn

What is the company's outlook for achieving its annual net new money target?

• Dependent on external economic factors

• Uncertain due to market volatility

• Confident despite quarterly fluctuations

• Pessimistic due to client behavior