UBS has enough capital to satisfy planned Swiss reforms, central bank says
Swiss National Bank Assesses UBS Capital Strength Amid New Reforms
ZURICH, July 2 (Reuters) - The Swiss National Bank said on Thursday that UBS is so well capitalised that it already meets proposed tougher capital requirements at the heart of efforts to strengthen banking rules after Credit Suisse's collapse in 2023.
After UBS acquired its fallen rival, authorities moved to impose stricter rules on Switzerland's last remaining global bank to help prevent a repeat crisis.
Proposed Capital Requirements and Government Measures
Among the measures, the government wants UBS to fully capitalise its foreign subsidiaries, and calculates its raft of proposals would require the bank to add about $20 billion in common equity tier 1 (CET1) capital.
SNB's Perspective on Capital Adequacy
"It is proportionate," SNB Vice Chairman Antoine Martin told reporters in Bern, referring to the government's capital pitch. "It would put UBS in line with international peers with respect to capital requirements."
UBS Responds to Regulatory Demands
UBS argues the demands are excessive and risk undermining the competitiveness of Switzerland's financial sector.
"The sizeable and unwarranted cumulative capital impact of the proposed measures would be a significant competitive disadvantage both domestically and internationally – as recognized by truly independent observers," UBS said when asked for comment on the SNB's assessment.
Financial Stability Report and Capital Calculations
Current Capital Position
In its 2026 financial stability report, the SNB said UBS's eligible CET1 capital exceeds the fully applied requirements of existing rules applicable from 2030 by $13 billion.
The Zurich-based lender also held available reserves of $9 billion at the end of 2025, the SNB added.
Pro Forma Calculations and Transition Period
"According to the pro forma calculations of the authorities and including reserves, UBS already has sufficient capital to meet the proposed requirements," the SNB said.
The central bank noted that the government plans a seven-year transition period for the new rules.
Profit Expectations and Shareholder Returns
"Taking into account this transition period and the bank’s expected profits, UBS can be expected to be able to comply with the proposed capital measures, while continuing to distribute profits to its shareholders," the SNB said.
Macroeconomic Context and Sector Resilience
The SNB said since its 2025 financial stability report, economic and financial conditions have been challenging, in particular because of the conflict in the Middle East, trade tensions, and political and economic uncertainty.
Swiss Banking Sector Outlook
However, it said Swiss banks were well placed to cope.
"The Swiss banking sector is well positioned to withstand the current challenging macroeconomic and financial environment," the SNB said.
(Reporting by Dave Graham and Ariane Luthi, Editing by Friederike Heine, Louise Heavens, Elaine Hardcastle)