guy: sergio ermotti, speaking about the figures.ichael moore is still with us, as he has been throughout the week. we also bank of america merrill lynch. michael, ubs is interesting. it has changed its business model away from invest in banking, which is great, except for when you have a call for fixed income doing well. >> yeah. it certainly benefited them over the past few years. it is trading at a premium ou don't see at many banks, or at least not over the past year. this quarter was one where you wanted to be in the fixed income trading business. certainly they missed out on that, but equities didn't do quite as well as the big arrivals like morgan stanley are goldman, so you didn't quite get the boost that a lot of the banks did. guy: when you look ahead to what happens next, give me a sense of how the business -- what is going on in fixed income right now, and in foreign exchange, what turns into a good q4? >> markets look for trends. there has been a tendency for markets to look between meetings, rather than looking at multi

with got more from ubs chief executive sergio ermotti's interview with bloomberg.nd pirates on the cusp of power. snap elections could see the country's conservative party in reykjavik. and the french economy grows less than expected. we get analysis from trusted sources. this is bloomberg. ♪ >> it's impossible to make decisions today i met people are not moving people considering the point we have in front of us. i think it would be a very risky decision. we are going to wait and see. as time goes by, we get some clarity about, if not the final outcome, at least on the time necessary, or that will be allowed to implement whatever the final solution is going to be. it may well be that we are not moving anybody or it may be that we move people. in absence of certainty, we won't make any decision. the real uncertainty -- we talk about the future in terms of cost or opportunity, but the true cost of brexit is already materializing now. if you look at the pension fund that we had, but also the industry had in the u.k., it is the first major sign of the cost. ermottis c

. -- francine lacqua is there standing by with sergio ermotti. francine: there's one or two things going on with the banks. what is the mood out there? one, we gotsame ,uite used to every other week financial markets are now more stable. we still need to go through all the challenges we are facing on the macro front. how much do negative rates hurt you? sergio: they hurt us in respect of our ability to generate revenues on our deposits. we have a long inventory of deposits. our clients are very risk-averse. that is a real challenge. francine: deutsche bank is one of the biggest concerns. how many times do you get asked how ubs is different? sergio: i was waiting for that question. deutsche bank is in a graphic situation. a situation that is much better than people probably assume at this point in time. the system is very strong. the same kinds of discussions and matters five or six years ago would have created much more turmoil. thateason i'm confident is i see how the system reacts and i get comfort about this. francine: have you think the doj i

sergio ermotti is switzerland. he is the ceo of ubs.. >> thank you. >> at a time when we are all wondering about the health right now of the european banking sector. what are you telling people? >> well, look, the european banking sector is quite sound. we made huge progress in the last seven, eight years in addressing, you know, not only the capital position of banks but also developing of better business models and trying to be sustainable. of course the macro environment is not very constructive for banks. at low rates, negative rates, you know, putting a lot of pressure on profitability and all the rest of the story -- >> how can you say that the european banking sector is quite sound when last week we were all wondering whether the german government was going to have to come and bailout deutsche bank? >> i would look at situation as being good proxy for the entire banking industry. i think it's matter of capital and increased seven, eight times in the last years. there are some issues where that needs to be addressed in europe. but

joining me live is sergio ermotti on the phone.nk you for joining us. 11%, but its up by looks as if it is a tough quarter to get the clients to trade. addition to all of the macro thinks you just mentioned, if you look at the quarter on quarter, it the very strong results. we have been able to build up on our capital position. very close to our target. good progress on our target. i am very pleased. the diversification of our business has proven to be a winning proposition in this very challenging environment. manus: can i ask you about the comments you made? negative rates are a considerable headwind. sir, will this mean having to review front office in the wealth management business? does it change your perspective in terms of the future outlook for the bank? i think we have a very comprehensive and ambitious net-reduction target, 2.1 cost. it does not include any reduction or benefits from exiting businesses. or variable compensation that is .riven by financial performance ours a fairly demanding -- wealth management businesses

nancy lock while caught up with the ubs ceo sergio ermotti.ighed in on deutsche bank and whether or not the european banking system is broken. >> financial markets are now of theable in respect soundness of the banking system. of course, we still need to go through all of these challenges we are facing on the macro front and also geopolitical front. negative rates, how much do they hurt you? ,> they hurt us in our respect generating revenues on our deposits. very long inventory of deposits, our clients are risk-averse. so they go into cash. that is punitive not only in terms of margins, but also capital consumption. is a real challenge, a double whammy we are facing now. francine: deutsche bank is one of the biggest concerns. how many times are you asked why you are different from deutsche bank? >> i was waiting for that question. deutsche bank is in a unique situation, but it is still a situation that is much better than people probably assume. strong.em is very the same kind of discussions and matters five or six years ago would have created

pension that we had, mark: sergio ermotti. vonnie?onnie: still ahead -- shares plunging rtis are after they slash profit forecast. we'll have the latest on the challenges the company is facing. this is bloomberg. ♪ is mark: this is the european close on bloomberg markets. vonnie, six minutes until the end of the friday session. vonnie: absolutely. live from new york, another few hours here in the u.s. i'm vonnie quinn. now a look at some of the biggest business stories in the news right now. third quarter profits soared 21% at mastercard. that beat estimates. the second largest u.s. payment system says consumer card spending increased. master card has been signing partnerships with google and samsung, also been developing its own digital wallet. shares of novo nordisk plunged by the most in 14 years. the world's biggest maker of of insulin slashed its target growth by half. novo nordisk c.e.o. spoke with bloomberg tv. >> what we have been telling our investors is we expect approximately% negative impact on our u.s. sales next year fro

david: how do you cut cost to the degree that sergio ermotti wants to cut them?ting into the relationships that drive that wealth managing business? >> it's difficult. i think one of the things -- obviously, that's head count but also i think just being smart in terms of improving the technology, cutting or outsourcing costs. all of these things have a big part to play in producing costs. jonathan: thank you, arjun. there was a bright spot but the net new money that came into u.b.s. from asia. most of it coming from asia. bernstein said it might be a read across the credit suisse. they are trying to do the same thing with the wealth management side of the business. they report next week. maybe that's a story to look out for. lix: the net inflows into asia pacific working on both levels. how do you fix that? cost cutting isn't going to do it at the end of the day. we have the ultra high net worth individuals. their margins are less. if they pull back, how do you fix it? david: that is the relationship business. that is the person who is managing their money and th

the chief executive sergio ermotti spoke to us earlier this morning. >> third-quarter earnings did beat estimates overall. it was a very strong result. we have been able to build up also on our capital position on the labor situation side. so,ere very close to our -- a good money and flow, good progress on costs, so i'm very pleased, because of the diversification of our business has proven to be a winning theme. guy: meanwhile, rbs has been profit expectations by almost double, but still close to a net loss . -- but still posted a net loss. parker, senior advisor for credit suisse, joins us live. bob, this is the chart that i think people are paying attention to. it's the health care sector, and this is the banking sector. look at what has happened. those lines have firmly crossed, very symmetrical, with money theng out and moving -- areas where valuation might be more attractive. first, on the health care sector, if you look at valuation ratios between defensive sectors and cyclical sectors, all year defensive has been super expensive. i think in addition investors are concerned about

then, 20 minutes later, we will be speaking to sergio ermotti. then, we are speaking to the eu commissioner. manus: a lot is going on. let's tell you what is coming up on "countdown." goldman sachs downgrades the electric carmaker, adding to the woes of the ceo, elon musk. anna: the german lender will be holding informal talks and raising capital. will the biggest ipo since glencore yield to expectations? we take a closer look. this is bloomberg. ♪ manus: yes, it has indeed. it is just after lunch, 18 minutes after 1:00. nervous, 23,821 for the hang seng. let's get the business flash with david ingles. david: thanks, manus. let's start with samsung. the company had better than expected third-quarter earnings. the impact of the note 7 recall was limited. samsung did not specify the financial impact of the recall of its flagship smartphone, but analysts are estimating it is between $1 billion and $2 billion. if the post merger earlier this year, but it was rejected according to a person with knowledge of the matter. had it gone through, it would've

we'll be speaking with jim yong kim, sergio ermotti and chairman alan greenspan.age starts tomorrow, 10:00 a.m. eastern, squawk on the >>> variety releasing its list of top paid tv talent. >> we love this stuff. >> netflix actors claimed three of the top five spots in the drama category. and look at that. lauren graham and alexis bledel of the not yet released "gilmore girls," $750,000 an episode, beatinging out peter dinklage from "the game of thrones." >> plus, netflix signed this deal with luxury theatre chain i-pic, releasing on the big screen the same day they appear on the streaming service. this has been tried before. it will be interesting to see if people actually go to the theatre to watch. >> a lot of times with niche movies where they want to have it for some purpose or another. the theatre chains don't like this, obviously. they try to preserve that exclusivity. to me, all this stuff kind of speaks to netflix being at least increasingly just another studio and distributor. in other words, they're very much more like an hbo than like some unique animal

gary cohn, president of goldman sachs your sergio ermotti, group chief executive officer at ubs.icking is pressured and group chief executive officer at mitsubishi ufj financial. i will turn over to my colleague, martin spent it's a great honor and pleasure to be here to moderate this session on the global output, outlook. fortunately, you all have been introduced already. i don't think i need to repeat that. it's and public obligated world. we don't have much time so i will start very quickly. i suppose if i were think about the world now from the developed country point of view, it's inflation meets political risk. we have been living in this sort of post crisis limping growth and low inflation desperate central banks trying to do everything they can and still doing it sort of world, and the finally, it really has hit politics in a very, very big way. i think the combination has made the world just simply wildly unpredictable with events happening which i think nobody would've imagined a year or two ago. notably brexit and pretty obviously donald trump emerge as a presidential