UBS Australia co-CEO Anthony Sweetman: Market confidence is returning

Investment banking boss Anthony Sweetman says despite cash rates holding high, confidence is coming back around dealmaking.

UBS CEO Anthony Sweetman. Weak productivity is hurting inflation Picture: John Feder/The Australian.

CEO SURVEY 2025: FULL COVERAGE

Economy

How would you rate the momentum of the Australian economy as we head into 2025? Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view? What are you seeing around inflation in your own business?

Overall, real GDP in the third quarter of 2024 was weaker than expected, growing at only 0.8 per cent year on year, the weakest since COVID. However, productivity is negative, so inflation is easing only slowly. Looking ahead, GDP is supported by household tax cuts (worth around $23bn, or around 0.8 per cent of GDP), and likely additional fiscal stimulus. UBS expects a moderate recovery in 2025 to 1.9 per cent year-on-year.

UBS still expects the RBA to keep the cash rate ‘higher for longer’, with the first rate cut of -25bps not until May 2025.

While inflation continues to be an issue across the economy, it has been manageable for UBS given our scale and market leading positions in Australia.

Outlook

What excites you heading into 2025? Are you likely to increase, hold steady, or trim your investment spend?

Market sentiment and the outlook for transaction activity appears strong as we head into 2025 which hopefully will translate into generally strong conditions for UBS. Given the favourable outlook we expect to maintain our significant level of investment in Australia with the potential increase in areas that have further growth opportunities.

Reform

As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.

The key pressure point for the Australian economy remains managing inflation. Key policies that would be most helpful include: 1) easing the pressure on the housing market, by a better coordinated approach to improve supply; and 2) improving labour market flexibility to support sustainable wage gains via higher productivity.

Geopolitics

Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)? Does geopolitics drive a bigger part of your decision-making?

Market indices and expectations regarding transaction activity have increased since the US election in November, which is positive for UBS’ businesses. Geopolitics are more of a consideration for our clients rather than to us directly for our businesses in Australia.

People

Has your organisation’s approach to flexible working - including working from home - evolved during the year. Is this likely to change further into 2025?

UBS has long supported flexible working arrangements. A large number of our staff work flexibly, subject to their role, business needs and any regulatory restrictions. Our workforce spends the majority of the week in our offices and we are seeing more of our employees electing to spend more time in the office compared to previous years. We expect this trend to continue in 2025.

Technology

Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promise?

UBS is actively utilising generative AI (GenAI) as part of our strategy to drive growth and increase productivity across all our business divisions.

We already operate many active AI models, primarily supporting informed decision-making and process automation and are continuing to assess how our engineering and coding processes can be further augmented with AI.

New models are actively being developed and will help reshape our capabilities and business processes, enabling information processing at the speed and accuracy that our clients will come to expect. UBS is also currently rolling out 50,000 Microsoft 365 CoPilot licenses by Q1 2025, which is the largest implementation to date within the financial services industry.

We’re optimistic that employees will experience the efficiencies from AI tooling and our clients and shareholders will benefit from a more personalised, relevant, on-time and seamless experience in a responsible and ethical way. We have developed a robust AI governance and control framework to ensure clients and employees are safeguarded.