UBS CEO Warns Swiss Capital Rules Could Force $20B Raise, Threaten Buybacks
UBS sits 40% above its 52-week low of $36.295.
Summary
CEO Sergio Ermotti is publicly lobbying Swiss lawmakers to soften proposed capital rules ahead of Wednesday's upper house vote. The government plan could force UBS to hold ~$20B in additional CET1 capital, while a committee compromise would require ~$13B in AT1 securities. Ermotti says the full CET1 requirement is excessive and would hit customers and employees. Chairman Kelleher previously warned UBS may reconsider its Swiss presence if rules are too onerous. The outcome directly affects UBS's capital return capacity—heavier CET1 requirements would constrain buybacks and dividends. Vote is Wednesday; final rules will determine the capital raise size and funding mix.
At the time of this announcement, UBS was trading at $50.70 on NYSE in the Finance sector, with a market capitalization of approximately $153.5B. The 52-week trading range was $36.30 to $55.99. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Seeking Alpha.