Swiss Upper House Puts UBS Capital Overhaul on Hold Until Late August
Published on 08/12/2026 at 03:15 | Redaktion boerse-global.de
A pivotal decision on how much capital Switzerland's largest bank must hold against its foreign subsidiaries has been pushed back, with the upper chamber's economy committee deferring a vote until 31 August 2026. The move clears the way for a full parliamentary debate in September, when senators will weigh competing proposals that could reshape UBS's balance sheet by tens of billions of dollars.
The committee, known as WAK-S, wrapped up its initial deliberations on 11 August without reaching a consensus. At the heart of the dispute lies a government proposal requiring UBS to back its overseas units with 100 percent Common Equity Tier 1 capital (CET1) — a dramatic jump from the current 45 percent threshold. If adopted in its original form, the bank would need to raise an estimated 20 to 22 billion US dollars in additional capital.
Alternative Models Gain Traction
Resistance to the Federal Council's plan has been building within the committee, where several compromise options emerged during the August session. One approach would soften the CET1 requirement to either 80 or 75 percent, while another would tie capital obligations to the actual scale of a subsidiary's international business rather than applying a blanket rule.
A separate strand of discussion revolves around Additional Tier 1 (AT1) hybrid bonds, which could serve as a buffer to ease the strain on core capital. Thierry Burkart of the FDP has championed greater use of these instruments as a way to moderate the burden on the bank.
Expert opinions remain divided on the ideal mix. Some proposals circulating in the committee suggest combining an 80 percent CET1 floor with up to 20 percent AT1 instruments, while other specialists advocate a 50/50 split between hard core capital and supplementary capital. The committee must settle on a single model before the end of August, when it will submit its recommendation to the upper house.
Regulator Ramps Up Oversight
Meanwhile, the Swiss financial market supervisor Finma has substantially expanded its scrutiny of UBS. The authority now employs 60 staff members dedicated exclusively to monitoring the banking giant — nearly three times the 22 full-time positions originally planned in spring 2024.
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Solid Results Despite Uncertainty
The regulatory turbulence has not dented UBS's recent financial performance. Second-quarter 2026 earnings came in at 0.72 CHF per share, up from 0.62 CHF in the same period a year earlier. Revenue reached 16.13 billion CHF, a marginal 0.28 percent dip year-on-year. Analysts project a full-year dividend of 1.25 US dollars for 2026.
Investor sentiment remained cautious on the day of the committee meeting. UBS shares slipped 0.8 percent to 43.49 CHF on 11 August, staying close to the 52-week high of 44.44 CHF reached in mid-July. The stock had bottomed out at 28.25 CHF in March of the same year.
