UPDATE 1-UBS CEO against reducing bank's size in face of regulatory concerns

UBS CEO Sergio Ermotti said on Friday he did not plan to reduce the bank's size amid pressure from Swiss regulators to boost its resilience following its emergency takeover of Credit Suisse.

Ermotti told a business conference on Friday he was hopeful a "sensible solution" could be found on regulatory matters currently under discussion in Bern, but reducing the size of the bank was not the best approach for UBS. "Shrinking the bank is not a strategy," Ermotti told the event.

UBS has been lobbying to soften proposed regulations set out in June that are designed to protect Switzerland should the lender, the country's sole remaining global bank, run into difficulties. The Swiss government's measures envisage that UBS - which has a balance sheet about twice the size of the country's economy - should capitalise its foreign subsidiaries by 100% rather than 60% currently to cover potential losses abroad.

That could mean the bank has to carry an extra $24 billion in capital, which analysts have said would hamper its ability to reward investors. Reuters reported in July that UBS had stepped up contingency planning, including considering moving its headquarters, although Ermotti later said the bank was focused on staying in Switzerland.

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