UBS may pass on negative interest rates to its very wealthy clients, increasing the cost of cash deposits.
According to Bloomberg, UBS Group AG CEO, Sergio Ermotti, suggested that the bank may stop shielding private individuals from the effect of negative interest rates. UBS and other Swiss lenders are currently passing the cost of negative Swiss Franc rates onto institutional and corporate clients, but tend not to pass on the costs to retail and private banking customers.
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Ermotti, speaking at the bank’s annual general meeting in Basel, said that UBS would implement negative interest rates for private clients if "conditions remain as they are or grow worse".
"We will have to demand payment for services that were previously free – with the possibility that additional fee adjustments in the future will also be necessary", he added.
UBS revealed a fall in first quarter profits of 64%. Its wealth management division reported a pre-tax profit of 557m francs $571m), down from 951m francs a year earlier.
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