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UBS buybacks may be hit by new capital rules: Swiss government
Published by Global Banking & Finance Review®
Posted on June 6, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 6, 2025
2 min readLast updated: January 23, 2026
UBS may reduce share buybacks due to Swiss government proposals for higher capital requirements, aiming to strengthen the financial sector.
ZURICH (Reuters) -UBS may be able to carry out fewer share buy-backs in future following proposals that it should hold higher levels of core capital, the Swiss government said on Friday.
Still, UBS restated its capital return plans for this year after the proposals came out, including share buy-backs, and said it would communicate its 2026 capital returns ambitions with fourth quarter and full-year financial results for 2025.
The government proposed higher capital requirements for the lender's foreign units as part of wide-ranging new rules for UBS aimed at making Switzerland's financial centre more robust in the wake of the collapse of Credit Suisse in 2023.
Dividend payments and organic growth should still be possible, subject to "appropriate transitions periods and provided profits have been generated," the government said.
"The measure could mean that UBS will temporarily implement fewer share buybacks and reports a slightly lower return on equity along with lower risks," the government said.
UBS Chairman Colm Kelleher in April reiterated the Swiss bank's intention to repurchase shares to the tune of $3 billion in 2025, despite the looming capital rule changes and global economic uncertainty.
The growth of foreign subsidiaries or acquisition of foreign companies by UBS will still be possible, but will become more expensive because it has to be fully financed by the core capital, the government added.
"The measure can therefore make foreign growth in subsidiaries more expensive," it added.
As the regulatory changes are not expected to be effective before 2027, UBS said it was maintaining its target of underlying return on CET1 capital of around 15% and an underlying cost/income ratio of under 70% by the end of 2026.
(Reporting by John RevillAdditional reporting by Ariane LuthiEditing by Dave Graham)
The Swiss government proposed that UBS should hold higher levels of core capital, which may lead to fewer share buybacks in the future.
UBS has restated its capital return plans for this year, including share buybacks, and aims to communicate its 2026 capital returns ambitions in the fourth quarter.
The new rules will make foreign growth in subsidiaries more expensive, as it will require full financing by core capital.
The regulatory changes are not expected to be effective before 2027.
UBS is maintaining its target of an underlying return on CET1 capital of around 15% despite the proposed changes.
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