UBS Group AG Chief Executive Officer Sergio Ermotti told Bloomberg TV in Beijing that energy prices are likely to remain elevated due to the Middle East conflict, adding this pressure will weigh on markets. He stated clients aren't making dramatic shifts to asset allocation despite the conflict, though digesting its full impact will take time. Ermotti noted clients are broadly calm and have already diversified portfolios earlier this year, moving away from AI towards more diversified holdings. The bank has implemented contingency plans allowing staff relocation and maintaining operations through support from colleagues in Europe and elsewhere, though it may tactically slow certain investments.

Markets reacted with a risk-off stance after US President Trump set a deadline for Iran to reopen the key waterway integral to global energy flows. Brent crude has surged over 80% this year, trading around $112 a barrel. Ermotti emphasized that while the bank does not run on a "stop-and-go" basis, the ongoing crisis necessitates cautious investment approaches. The CEO's comments suggest UBS sees the conflict as a factor sustaining high energy costs and market volatility, but not yet prompting wholesale portfolio overhauls from its clientele.

UBS's operational adjustments highlight the practical challenges firms face amid geopolitical tensions. The bank's contingency planning, including staff relocation support and leveraging European networks, underscores the need for resilience. Ermotti's assessment that clients are "still, broadly speaking, calm" indicates a measured client response, though the sustained high energy prices and market pressure are expected to continue influencing economic conditions and investment strategies moving forward.