UBS Group is exploring various options in response to potential new capital regulations that may be overly stringent, including the possibility of relocating its headquarters or merging with another bank, according to three sources familiar with the matter who spoke with Reuters.
Read More
In late September, Switzerland's upper house approved new bank capital rules requiring UBS to support its foreign units with 90% common equity Tier 1 capital. This decision has been described as a setback for UBS, which had lobbied for less severe capital requirements to avoid significantly increasing its operating costs. Currently, UBS is required to back its foreign units with 60% capital, utilizing less expensive funding options.
The proposed legislation now moves to Switzerland's lower house, with a final decision anticipated no earlier than the end of 2026. According to the sources, UBS has prepared a list of smaller U.S. banks for potential acquisition and is also open to the possibility of being acquired, although no discussions are currently underway. It has been reported that Morgan Stanley would be the most suitable theoretical partner for UBS, as UBS Chairman Colm Kelleher previously served as president of Morgan Stanley until his retirement in 2019.