The escalating conflict in Israel and the dangers of a wider conflagration in the Middle East is a matter of some concern to Switzerland's largest bank.
In October on Linkedin, UBS chief executive officer Sergio Ermotti made his views about the escalating confrontation between Israel and the militant Palestine organization Hamas clear by urging for restraint on all sides:
«UBS stands firmly against all forms of discrimination, including both anti-Semitism and Islamophobia, and we stand with all who are working toward a swift and peaceful resolution», he wrote on the site.
Cloudy Outlook
A previous finews.com analysis shows that Swiss banks active in the Middle East do indeed face a balancing act. Many prefer to remain silent as any statement can be understood to be taking a side and the professional rule is not to talk about politics or religion with customers.
Then there is the danger of a spreading regional conflagration. As UBS indicated in its outlook for the remainder of the year in its disclosure materials for the third quarter, geopolitical uncertainties, particularly the conflicts in the Middle East and Ukraine, continue to cloud the macroeconomic outlook.
Total Exposure
As part of that, Switzerland's largest bank indicated in that its direct exposure to Gulf Cooperation Council countries stood at less than $5 billion and that to Israel it was less than $0.5 billion. That means that several billion are still at risk, in sharp contrast to the situation in Ukraine, Belarus, and Russia, where it categorizes its direct exposure as «immaterial».
It added that it had limited direct exposure to Egypt, Jordan, and Lebanon and no direct exposure to Iran, Iraq, and Syria.
Boom Region
The totals are relatively modest when looking at the group's risk exposures although the conflicts are still likely prompting internal headaches, not least given that the Middle East is seen as a future boom region for private banking.
Business there has been growing faster than elsewhere, with the United Arab Emirates, and particularly Dubai, becoming a new hub for ultra-high-net-worth individuals at a time when geopolitical blocks seem to be hardening.
