Santander announced last year that it would appoint Orcel, at the time UBS's investment banking chief, as CEO but this month said the appointment would no longer happen because of a complication over Orcel's deferred pay.

"It is not a realistic option for all the stakeholders involved," Ermotti said in an interview at the World Economic Forum when asked if Orcel would return to UBS.

The departure of Orcel, who was regarded as a possible replacement for Ermotti at UBS, has rekindled speculation about succession plans at the Swiss banking giant.

Ermotti, 58, is one of Europe's longest-serving banking chiefs, having been CEO of UBS since 2011. But he has poured cold water on the idea of a change at the top in the short term, saying this week that a succession was "years away."

"Do I look tired?" he said on Thursday, adding that while the bank was used to both hiring externally and promoting insiders, an external choice for top jobs often indicated a problem within a bank, which did not apply to UBS.

His comments appeared to contradict media reports that UBS was considering Bank of America Co ex-investment banking head Christian Meissner as a potential successor to Ermotti.

"We don't need fresh blood from the outside to be a catalyst of change," he said.

"When you have people coming from outside...in the vast majority of cases it's because the firm needs a huge discontinuity or is in a crisis, and that's clearly not the case for UBS."

The bank this week warned of a tough start to 2019, after reporting an outflow of funds from its flagship wealth management business at the end of last year and sending a shiver through the European banking sector.

Ermotti said it was too early to call the first quarter of 2019, although asset prices had stabilised since a brutal sell-off in the final weeks of 2018.

"The January to January comparison is a little bit challenging since last year in January we had the peak of the market and very enthusiastic market conditions," he said.

Speaking about Brexit, Ermotti said the bank's advice to its UK wealth management clients was essentially to keep a cool head and "not take any big bets."

"Don't be complacent about having too much exposure but don't jump into taking out things," he said. "A lot is priced in (regarding) a Brexit, maybe not a catastrophic one but at least a severe economic downturn in case of a Brexit. Diversification is the name of the game."

He predicted that both Britain and the European Union would seek to buy more time ahead of the existing March 29 deadline for Britain to leave the EU.

"I think they will take a break and buy time. Both parties have an interest in finding a solution," he said.

"The UK have to really decide what they want... and Europe has to understand that it's not enough to say it's this deal or nothing because there are also going to be consequences in Europe and I don’t think Europe needs any (more) bad things."

(Writing by Silvia Aloisi; Editing by Mark Trevelyan)

By Alessandra Galloni and Silvia Aloisi