Ermotti foresees a pick up in volatility, particularly in the second part of the year, but he said the company needs to be wary about the kind of volatility that lies ahead. "We have to pay attention to what we are wishing for here, if volatility is triggered by sudden changes in the macroeconomic environment, which we don`t expect, more particularly geopolitical events, that wouldn`t be a welcomed volatility for sure," he said.
"In general I am not comfortable (with the political backdrop). If I look at the radar screen of geopolitical events, I don`t think anybody in the world could be comfortable with what we see, because I see no issue disappearing from the radar screen and I see more and more stuff coming into the radar screen," Ermotti noted.
The Swiss bank is also cautious about the positive impact that rising U. interest rates might actually have on margins, given that rates are still very low in the euro zone and negative in Switzerland.
"A little bit of a headwind when you talk about negative rates in Switzerland is an understatement," Ermotti said.
"I do think that the low rates environment is still going to stay with us for the foreseeable future. I would think in the next 12 months is very difficult to see how Europe and Switzerland will get out of that environment," he said.
Shares of UBS were down 2.5 percent in the early hours of European trading on Monday.
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