Shares in UBS fell 2.1 percent by 1000 GMT, while shares in rival Credit Suisse fell 2.6 percent, with traders citing the downbeat tone of Ermotti’s comments.
“UBS sent a negative signal that Q1 investment banking revenues will be down across major European banks,” one trader said.
Switzerland’s biggest bank has now slowed hiring as well as its work on a number of IT projects to help the group save an additional $300 million this year, with most of the savings coming through in the second half of the year, Ermotti said.
While its flagship wealth management business looked set to return to targeted inflows after a brutal $7.9 billion in net new money outflows over the final three months of 2018, investor sentiment continued to weigh on revenues.
A continued somber view amongst Asian clients, coupled with U.S. clients sticking more to the sidelines, kept transaction-based income under pressure, Ermotti said, leading to a roughly 9 percent slide in wealth management revenues this quarter.
U.S. clients have boosted their cash holdings to record highs, Ermotti said, with about 24 percent of their balances in cash.
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