UBS CEO Sergio Ermotti struck an upbeat tone at the Swiss bank's investor meeting, while carefully acknowledging setbacks. He couldn't resist a dig at crosstown rival Credit Suisse. 

Sergio Ermotti is clearly in legacy mode: the UBS CEO told shareholders the bank made $19 billion in profits in the last five years (to be fair, almost $6 billion went out the door to settle big scandals including $774 million in 2014 for rigging foreign exchange markets – click here for a league table of the Swiss bank's largest-ever fines).

At the same time, UBS had bolstered its capital by $9 billion in the same period. «And bear in mind: this has all been done without raising additional capital....and without diluting shareholders when paying dividends, for example», Ermotti told investors in Basel on Thursday, according to prepared remarks.

Cash vs Share Payouts

Ermotti, a Swiss banker who turns 59 next week, is too polite to be specific, but the remarks appear to be a dig at hometown rival Credit Suisse. The second-largest bank in Switzerland has tapped shareholders twice in the last three years under CEO Tidjane Thiam. 

Credit Suisse didn’t even convert to cash dividends until 2017, following years of share-based awards, or so-called scrips. Thiam and Chairman Urs Rohner also didn't pledge a ratio of profits to investors, as UBS did in its major 2011 restructuring, until last December. Then, Credit Suisse said shareholders would receive at least half of this and next year's profits paid out.

Mixed Messaging

His upbeat remarks contrast with a dramatic warning from him six weeks ago, shortly before quarter-closing. The AGM follows a torrid couple of months for Ermotti: first-quarter profit tumbled, a French criminal trial is set to last at least another two years, and the CEO may suffer the indignity of shareholders denying him and UBS' directors approval because of it.

Ermotti didn't address France – he and Weber defended their stance in the matter separately – but generally acknowledged UBS need to improve. «We are on the right path. It may be bumpy now and again – after all, no way is easy all the time», he said. «The important thing is to go in the right direction. And to keep staying positive.» Nearly three hours into the annual meeting, shareholders are still on the first of ten agenda points.