UBS closes branches in Ticino Gordola, Giubiasco and Melide

Of the 44 branches that UBS intends to close by the end of March, three are in Ticino: Gordola, Giubiasco and Melide. Luca Pedrotti, regional director of UBS Ticino says the employees affected by the measure will be transferred and no layoffs are foreseen.

Which and how many branches have you closed in Ticino?

«44 branches will be closed in Switzerland, of which three are in Ticino: Gordola, Giubiasco, and Melide. The operation will take place by the end of March. So, 13 branches with branches remain active in Ticino. Two buildings dedicated to wealth management activities (Via Pretorio and Piazza Riforma in Lugano)».

How many employees will be affected by the changes in Ticino?

«In total 14 collaborators, all of them will be integrated into the main offices in Locarno, Bellinzona and Lugano. No layoffs are planned, with the aim of integrating all the collaborators concerned with their respective functions in the main offices».

Are layoffs avoided or just postponed because we are in a crisis situation?

«The next few months will be dedicated to the passing of customers and therefore there will be a lot to do. The vast majority of collaborators will continue to do the same job; it is not excluded that in the long term for someone it will be necessary to find a solution in another area».

The closures were justified by management by reducing customer visits to branches. Was this due to the pandemic?

«The evaluation criteria were to identify which branches experienced the greatest decline in activity at the counter. Over the last ten years, 70% of over the counter transactions have disappeared. By contrast, two thirds of customers in each segment now use digital transactions. It is therefore clear that this trend leads to a general reduction in offices, focusing on where we can guarantee greater completeness of services and skills. It is also a question of cost control. Obviously, the particular period of the pandemic has accelerated the use of digital platforms, but we would have arrived at this decision regardless of COVID-19».

So does it confirm that the decision to reduce branches has deeper roots than the arrival of Ralph Hamers as chairman of the management?

«Absolutely yes. In Ticino we remain with 13 branches plus two. With the closure of six branches in two years (Airolo, Savosa and Serfontana in 2020, in addition to the three announced today, ed.) We have reduced our physical presence in Ticino by a third, but we are still convinced that we are able to manage better relations with our customers».

How much does UBS intend to save with this deal?

«This data will be communicated with the annual results in a couple of weeks.»

Are the three closed branches owned or rented by you?

“All three are rented. There are some contracts that will expire after the end of March so it will be necessary to reach an agreement with the owners».

As you said, a third of customers do not use the Internet: have you thought about additional services for them?

“Clearly this is a challenge, especially for older customers who generally need more assistance. On the one hand, we are able to serve a good range of customers through the remaining network of offices. On the other hand, where there was a need, for example in case of impossibility to move, we are the ones who reach customers at home or in any case offer an alternative solution. Among other things, this already happens today for particular situations. Little by little we will try to meet everyone».

Has UBS also seen greater use of technology by the elderly with the pandemic?

“In general there has been an increase in all age groups, including the elderly. This is the age group that presents the most challenges, however: on the one hand there are those who refuse, but on the other hand there are also those who have welcomed smartphones favorably».

Are branches decreasing but ATMs increasing?

«No, on the contrary, I believe that ATMs are also destined to decrease. Until ten years ago the ATM was an alternative to the teller. Today, however, the alternative is the smartphone, given that the use of e-banking and digital platforms has literally exploded».

It is part of the strategy for regional banks to be more present in small towns, UBS closes branches. Aren’t you afraid of giving way to the Raiffesen on duty?

«The degree of satisfaction of our customers in the use of digital platforms is surprisingly positive. Surprisingly, because customers got used to using them much faster than we expected. The digital service is considered faster and more agile, and customers using the platforms are even happier with their banking relationship. So it may well be that we will lose some customers in favor of the regional banks, but our services are really at the forefront so we are not afraid of large outflows».

UBS announced on Monday that it plans to double its staff in Asia, but news of branch closures today. A clear strategic signal that wealth management abroad is more important than in Switzerland?

“It is clear that as a global bank we tend to invest where there is wealth management potential. In Ticino it is also true that in recent years we have reduced the staff for certain profiles, but we have also created others. For example, the Service Line in Manno (the telephone assistance service) has grown from 20 to 60 people in 3-4 years, and we will probably grow again. From there we also follow a part of French-speaking Switzerland. The Manno Competence Center employs nearly ninety people and we expect to reach 100 by the end of the year. It is clear that there is often a «transfer» of profiles between sectors. On the other hand, a career in the bank is no longer vertical: today the employee must have the ability to move sideways to grow».

UBS also announced a drastic lowering of the limit to impose negative rates. Aren’t you afraid of asset outflows from customers who rightly want to avoid paying just because they saved?

“We have raised the limit from 2 million to 250 thousand francs since July 1st. The decision is inevitable because the costs that the bank has to bear due to negative rates are enormous. We are aware that we will have to face discussions with clients but we do not fear large outflows as there are banks with lower thresholds. There are also special situations whereby the threshold can be raised up to one million francs depending on the type of investment».