In the high-stakes drama of soured loans and failed investment banking ambitions that is European finance, Sergio Ermotti has a problem others would love to have: His UBS Group AG is starting to look a little dull.

Seven years after a sweeping revamp of the bank, whose tilt toward wealth management became a blueprint for rivals, the chief executive officer is overseeing one of the most stable lenders in Europe. The stock is trading at a premium to peers, clients are adding assets and the bank reports predictable profits.

But as turnaround plans at peers such as Credit Suisse Group AG gather speed, some investors are asking whether UBS is doing enough to sustain its lead.

“People I speak to are just concerned the story has got a bit boring, a bit stale," said Amit Goel, a bank analyst at Barclays Plc. “They’re looking at what’s the next thing that drives outperformance apart from that the market just goes up."

Ermotti tried to address such concerns with a strategy update in January, the first in four years, in which he outlined plans to buy back as much as 2 billion Swiss francs ($2 billion) of stock and merge the bank’s two huge wealth-management businesses. But the buyback did little to lift the stock, and the wealth merger was seen as lacking detail, leaving UBS’s shares trailing those of rivals including Credit Suisse and Barclays.

UBS fell 0.3 percent at 10:21 am in Zurich trading, bringing losses to 21 percent since the bank announced the buyback on Jan. 22. Credit Suisse has declined 17 percent in the period.

The CEO has another chance to persuade shareholders when UBS reports second-quarter earnings, scheduled for July 24. In a statement, the lender said that investors support its strategic direction and its updated targets point to “significant ongoing efficiency improvements.” It doesn’t make sense to announce a big public cost target because UBS is not in restructuring mode, the bank said.

“When you look at all key relative indicators, then it’s clear that we’re positioned at the top of our peer group,” UBS said. “Doing your homework early doesn’t make you less smart -- even when others decide to do theirs later and start improving. It’s no coincidence that UBS is one of the few banks that earns its cost of capital.”

Boosting the share price seems an increasingly Sisyphean task as the bank’s hard-won stability, a treasured trait in the aftermath of the financial crisis, is now being faulted for the stock’s lack of excitement. One top 20 shareholder, asking not to be identified, said their institution had held internal discussions about the reasons for the stock performance. One conclusion: UBS could communicate better on cost cuts compared with rival Credit Suisse.

UBS is the largest manager of billionaire money in the world. The bank’s $2.3 trillion wealth management business outstrips U.S. rivals Bank of America Corp. and Morgan Stanley. But unlike the American competitors, Switzerland’s largest bank has almost half of its wealth assets spread internationally managed in a jumble of booking centers and currencies. That, the bank contends, makes it a more complex and expensive business to run.

First « 1 2 » Next