Swiss Regulator Sets Capital Rules for UBS, Credit Suisse
(Updates with analyst comment in fourth paragraph, UBS statement in fifth.)
May 7 (Bloomberg) — UBS AG and Credit Suisse Group AG, Switzerland’s biggest banks, must have capital ratios of at least 19.2 percent and 16.7 percent respectively in 2019, the country’s banking regulator said, as it sought to ensure they can withstand future financial shocks.
“It is not unreasonable to assume” the requirements, which are based on 2012 data, will decline given the banks’ plans to shrink balance sheets, the Bern-based Financial Market Supervisory Authority said in a statement on its website today.
UBS and Credit Suisse, which are both based in Zurich, would also be required to hold capital equivalent to 4.6 percent and 4 percent of total assets respectively, the regulator said. The requirements depend on the companies’ size and market share in Switzerland, according to the statement.
“This should not impact on either banks’ ability to start to return excess capital to shareholders,” Christopher Wheeler, a London-based analyst at Mediobanca SpA, said by e-mail.
UBS expects the total capital ratio to be 17.5 percent in 2019, with a leverage ratio requirement of 4.2 percent, as disclosed during first-quarter results yesterday, it said by e- mail.
The bank said yesterday it will continue to shrink its balance sheet, bringing assets that are used to calculate the leverage ratio to 900 billion francs ($1.03 trillion) by 2016 from 988 billion francs at the end of March and 1.2 trillion francs at the end of 2012.
Credit Suisse spokesman Marc Dosch declined to comment on Finma’s statement.
–With assistance from Jeffrey Vögeli in Zurich.
To contact the reporters on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net; Elena Logutenkova in Zurich at elogutenkova@bloomberg.net To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Mark Bentley, Dylan Griffiths
