Stock market views from UBS outgoing chief Sergio Ermotti

Sergio Ermotti, CEO of UBS AG Group at the World Economic Forum in Davos, Switzerland.David A. Grogan | CNBCLONDON — Don’t underestimate current geopolitical uncertainties, was Sergio Ermotti’s parting gift as he delivered his last results as the boss of the Swiss bank UBS.Speaking to CNBC Tuesday, he said: “We speak a lot about stimulus and Covid-related matters but the geopolitical uncertainties in Europe and also in the Sino-U.S. relationship is still there and they’re there to stay. So we shouldn’t underestimate that.”European politicians have struggled to alleviate tensions with Turkey, Russia and Belarus — just to name a few recent issues. At the same time, the trade spat between the United States and China is not fully resolved despite the signing of a “phase one” agreement.In addition, there’s a lot of focus on who will win the U.S. presidential election, due next month.I don’t believe banks are, particularly, (a) bad actor.Ermotti, who joined UBS in 2011 and became chief executive in 2014, believes that investors will be shifting their portfolio positions in the runup to that vote.”Investor survey(s), client survey(s) that we do tells us that most likely we will see, running into the elections and after the elections, a shift in their asset allocation,” Ermotti told CNBC’s Geoff Cutmore.He explained that investors will have to rapidly react to different policies depending on who wins between incumbent Donald Trump and Democratic rival Joe Biden. “You may have completely different tax plans and fiscal stimulus being implemented in certain ways favoring certain sectors,” he said. I think the image of banks has improved dramatically.Looking at different geographies, Ermotti believes there are greater growth opportunities in Asian and U.S. markets, as Europe still lacks competitiveness.Ermotti started at UBS at the peak of the euro zone debt crisis of 2011, which coincided with public anger toward the banking sector for contributing to one of the worst financial shocks in history.However, Ermotti believes that banks have learned their lessons and have managed to improve their reputation in recent years, saying that “banks are made of humans and humans are a reflection of society. I don’t believe banks are, particularly, (a) bad actor.””Banks have been demonstrating the ability to adapt and learn the lessons from our mistakes during the financial crisis. By the way, we were not the only ones making mistakes there, but today I think the image of banks has improved dramatically,” he said.Ermotti will leave the world’s largest wealth manager at the end of this month.

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