Swiss Parliament's Upper House Backs Plan to Ease New Capital Demands on UBS

By Michael Hennessey

The upper house of Swiss parliament backed a proposal to ease new capital demands on UBS Group, while rejecting a stricter requirement in a bill put forward by the country's government.

Under the proposal that received majority support from the Swiss parliament's upper house on Wednesday, UBS would be required to hold 90% in top-tier capital against its foreign subsidiaries. The capital-rules bill will now move to the lower house of parliament.

UBS said the decision would result in an excessive tightening of Swiss capital requirements if confirmed at the conclusion of the parliamentary process. The bank said it would focus on protecting its long-term interests.

If implemented in its current form, the proposed requirements would translate in about $16 billion of additional CET1 capital demands for UBS, according to the bank's own estimates. The so-called CET1 capital is the highest-quality capital held by a bank.

The vote was the latest twist in Switzerland's bid to overhaul its banking rules in the wake of UBS's rescue takeover of former cross-town rival Credit Suisse in 2023.

The Swiss government had proposed a bill that would require UBS to fully deduct the book value of its foreign subsidiaries from the CET1 capital of its parent bank, but its plan was rejected in Wednesday's vote.

The executive had already watered down the part of its regulatory package that didn't have to go through parliament earlier this year, and sent the other part for parliamentary debate. The Swiss lawmakers were voting on how strict new capital rules should be.

Uncertainty over the new rules has weighed on UBS's stock and left its future presence in its home market in doubt. Last week, UBS Chairman Colm Kelleher said the bank would consider its future in Switzerland if the new rules were too harsh.

UBS said the outcome of the process at the upper house isn't a compromise and fails to address the root causes of the Credit Suisse collapse.

The bank had received more favorably a proposal by another group of lawmakers to allow UBS to meet up to half of the new requirements with AT1 capital, which is cheaper to hold. UBS earlier this month said that plan would required to add around $13 billion to its top-tier capital.

In April, UBS estimated the full deduction of investments in foreign subsidiaries would require it to hold $20 billion in additional CET1 capital.

Write to Michael Hennessey at michael.hennessey@wsj.com

(END) Dow Jones Newswires

September 23, 2026 08:50 ET (12:50 GMT)