UBS weighs options outside Switzerland as additional capital requirements total about $16 billion
Key Facts
UBS is considering options outside Switzerland if proposed capital rules become untenable for the bank, sources cited by Reuters said, amid a dispute over requirements that the bank estimates would add about $16 billion under one component. The bank gave that estimate in its 23 September statement on banking regulation. The Wall Street Journal reported that it had received approaches from potential U.S. deal partners. But Reuters sources said the review of options had not progressed to actual talks. The bank declined to comment on speculation about its headquarters, telling Reuters: "We do not comment on speculation or opinions expressed on such matters."
The capital estimate is based on a proposal by Switzerland's Council of States requiring foreign participations to be backed by 90% common equity tier 1 capital, according to the bank's statement. This obligation applies to the parent bank, UBS AG, and is not an estimate of requirements for the consolidated group. Regulatory measures at the ordinance level add about $2 billion to the parent bank's common equity tier 1 capital requirements. Under rules already in place, the same entity must hold about $15 billion in additional capital following the Credit Suisse acquisition. These acquisition-related requirements predate the additional burdens covered by the parliamentary proposal and ordinance measures.
If the Council of States' decision is confirmed, UBS estimates the total increase in common equity tier 1 capital since the acquisition at about $33 billion. According to the bank's calculations, this total combines existing post-acquisition obligations, requirements for backing foreign participations and ordinance-level measures. The estimate of the overall burden therefore remains conditional on confirmation of the parliamentary decision. In its calculations of the impact of the capital requirements, the bank estimates the total annual cost resulting from the acquisition at about $2.5 billion. The bank provided the annual cost estimate alongside its estimate of the additional capital that would have to be held under this scenario.
The debate over the bank's location extends to its largest shareholders, with the Financial Times reporting, in coverage carried by Swissinfo, that Artisan Partners had contacted the board about remaining in Switzerland. The firm, a major shareholder, said the country was "no longer an attractive or desirable location" for the bank. Leaving Switzerland, however, could trigger a government exit tax of up to $10 billion, according to an estimate by Morgan Stanley analysts cited by the newspaper. That estimate relates to a scenario in which the bank moves abroad. Sergio Ermotti, meanwhile, said the bank needed a presence in the United States "to succeed", according to the same coverage.
The discussion of options abroad comes after UBS reported that group invested assets reached $7.3 trillion at the end of the second quarter of 2026. The bank described that level as a record in its earnings release. The group's common equity tier 1 capital ratio stood at 14.4% at the end of the same period. In the stock market, the bank's shares edged higher following the parliamentary vote in September, according to Reuters. They outperformed the European banking index at the time, despite the Council of States backing the stricter capital coverage plan.
The bank's official calendar set 28 October 2026 as the date for its third-quarter results. UBS had confirmed in its second-quarter results that it was on track to complete most of the Credit Suisse integration by the end of the year. On the legislative front, the package of rules moves to the lower house of the Swiss parliament. Reuters, in its coverage of the September vote, said a final decision was likely in 2027. According to a separate regulatory update issued by the bank, prudential valuation amendments take effect on 1 January 2027.