UBS Gains on Report It Mulls Ways to Avoid Swiss Bank Rules

(Bloomberg) — UBS Group AG gained and Morgan Stanley fell after a report that the Swiss lender is weighing options, including potential deals with banks in other jurisdictions, as the Zurich-based bank faces the possibility of stricter capital rules at home.

UBS has revived discussions about ways to move the bank out from under Swiss regulators, including through a combination with a foreign bank, according to a report from Semafor, which cited people familiar with the matter that it didn’t identify and didn’t offer any further details about the talks.

Earlier this week, a majority of the upper house of Switzerland’s parliament endorsed a plan that would force UBS — the country’s largest lender — to hold more equity capital. The firm has estimated that would require it to hold an extra $16 billion in CET1 capital.

The lower house is next to discuss the matter and the final outcome for UBS is unlikely to be known before some time next year.

In a section that was marked as the reporter’s view, the report named Morgan Stanley, Deutsche Bank AG or Standard Chartered Plc as potential combinations.

UBS climbed 2.5% in early trading in Zurich on Friday. Deutsche Bank and Standard Chartered also gained. Shares of Morgan Stanley slipped 1% in New York trading Thursday

Representatives for UBS, Deutsche Bank and Morgan Stanley spokesperson declined to comment. Standard Chartered didn’t immediately respond to requests for comment.

(Adds share prices, further detail of Semafor report.)

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