UBS discussing ways to skirt Swiss regulations as new law advances

(AWP Alliance News) - UBS Group AG has restarted discussions about ways it could avoid potential heightened Swiss regulations as a new set of banking rules progresses through the country's parliament, Semafor reported on Friday.

The Zurich, Switzerland-based financial services company is considering measures including a potential combination with a foreign bank, the report said, citing people familiar with the matter.

On Wednesday, Switzerland's upper house of parliament, the Council of States, voted in favour of the new regulations package, which will now move to the country's lower house, the National Council.

A final version of the law is expected to be agreed by both chambers in 2027, with potential for a public referendum to follow.

"If implemented, the proposed backing of foreign participations with 90% CET1 capital would require UBS to hold approximately USD16 billion of additional CET1 capital. This would come in addition to about USD2 billion of additional CET1 capital required at UBS as a result of the ordinance-level measures announced earlier this year," UBS said on Wednesday.

"We can live with a black eye, but two black eyes and a broken nose is too much," CEO Sergio Ermotti said of the law, which UBS argues would hamper its ability to lend profitably and put it at a disadvantage to US banks operating under the deregulatory Trump administration.

The new law is being considered in response to the failure of Credit Suisse, which was acquired by UBS in a 2023 rescue operation.

UBS declined to comment to Semafor.

Shares in UBS closed up 3.5% at CHF40.80 each in Zurich on Friday.

By Aidan Lane, Alliance News reporter

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