Swiss perspectives in 10 languages

UBS Says Swiss Capital Rule Would Mean Higher Profit Retention

(Bloomberg) — UBS Group AG says it would have to fund any new capital requirement from the Swiss government through higher profit retention, according to the bank’s Chief Financial Officer Todd Tuckner.

Reforms to the Swiss Too-Big-to Fail regulations imposed at the parent bank level would lead to an overshooting of capital at the group level, Tuckner said on a call with analysts following fourth-quarter results on Tuesday. 

Coming soon Lost Cells A podcast uncovering the human stories behind private stem cell banking's promises and failures. Get notified

That would mean a lower return on the bank’s Common Equity Tier 1, a ratio of profitability. Higher profit retention typically means less money to pay out to shareholders. 

Analysts have voiced concerns over UBS’s plans to distribute capital, given that the reforms, due to be set out in the Spring, could result in an extra requirement of up to $25 billion. Tuckner’s comments are the first time the bank has spelled out the consequences. 

UBS Chief Executive Officer Sergio Ermotti added on the call that there’s no easy fix to resolve the uncertainty surrounding UBS’s distribution plans. 

The Swiss government may decide to force UBS to maintain capital backing of its foreign units of 100%, up from the current level of 60%.

 

©2025 Bloomberg L.P.

Popular Stories

Most Discussed

SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR

SWI swissinfo.ch - a branch of Swiss Broadcasting Corporation SRG SSR