ZURICH (Reuters) - UBS Group UBSG.S Chief Executive Sergio Ermotti warned on Thursday that investors may be expecting too much too soon from Switzerland's biggest bank, noting heavy spending on technology would weigh on results in the short term.

CEO Sergio Ermotti of Swiss bank UBS speaks at the annual news conference in Zurich, Switzerland January 22, 2018. REUTERS/Arnd Wiegmann

“I have said this before –- we cannot, unfortunately, simply multiply the first-quarter result by four,” he said in remarks prepared for the bank’s annual meeting in Basel after the world’s biggest wealth manager boosted first-quarter net profit by nearly a fifth.

“While the macroeconomic environment may have improved somewhat, the geopolitical position remains difficult. And the interest rate situation -- particularly in Switzerland and Europe -- continues to be a challenge,” he said.

“As with many of our U.S. competitors, the market may have too high short-term expectations.”

UBS shares were 0.3 percent higher by midday. They have fallen more than 7 percent this year, lagging a 3 percent decline in the Stoxx European bank sector index .SX7P.

Ermotti said UBS was investing heavily in digital infrastructure and spending more than 10 percent of revenue –

or more than 3 billion Swiss francs ($3.01 billion)per year – on technology.

“This makes us more efficient and allows us to further develop our offering. All this, of course, has a short-term effect on our results,” he said.

The challenge was finding a balance between growing its business and investing in the future.

“But we also want to continue to increase the returns for our shareholders. We want to pay out an ordinary dividend that increases by a middle to high single-digit percentage every year,” he said, while returning additional capital primarily through share buybacks which began last week.

He said priorities for 2018 included becoming more profitable in the global wealth management business, maintaining its leading position in this area and continuing to increase profits in other businesses, and capturing growth opportunities, “especially in Asia and the Americas” while reinforcing its leading position in Switzerland.

($1 = 0.9963 Swiss francs)