UBS to Redeem JPY 8.3 Billion Notes as Bern's Capital Bill Looms Over Third-Quarter Results

UBS will call 8.3 billion yen in senior notes on 27 October 2026, as Bern weighs stricter CET1 rules for foreign subsidiaries.

UBS Group AG has moved to retire a slice of its own debt ahead of schedule, announcing that it will call 8.3 billion yen in outstanding Senior Callable Notes. The redemption is set to settle on 27 October 2026, with the final trading day for the notes on the SIX Swiss Exchange penciled in for 23 October 2026. The early repayment amounts to a routine reshuffling of the bank's liabilities before their scheduled maturity — a housekeeping step that runs alongside far weightier questions about the group's capital position.

Those questions have been building in Bern for weeks. Just over a week ago, Switzerland's Council of States (Ständerat) voted in favour of tougher requirements for the bank, agreeing that foreign subsidiaries should be backed by hard core capital (CET1) at a ratio of 90 percent. The Council of States' version is more lenient than the Federal Council's original proposal of 100 percent, but still a steep climb from the current 45 percent. The legislation now heads to the National Council, where the relevant committees will deliberate on 26 and 27 October and again on 23 and 24 November 2026, with a full plenary vote potentially following in December 2026.

A Capital Gap Measured in Billions

The arithmetic behind the dispute is stark. UBS puts the additional CET1 requirement under a 90 percent model at roughly 16 billion US dollars — about double its prior-year net profit of 7.8 billion US dollars. The Swiss government, by contrast, estimates the true shortfall at between five and nine billion US dollars. A 75 percent ratio is being floated in Bern as a possible political compromise. Chief executive Sergio Ermotti has already made clear that shrinking the bank is not on the table.

Analysts at RBC weighed in on 28 September, with estimates cited by Bloomberg suggesting the latest draft of the Swiss capital reform would shave 9 percent off earnings per share. If the strict rules were to stand, the bank would have to retain profits, pull capital out of subsidiaries, or raise fresh funds.

The political backdrop has left its mark on the share price. Since the chamber's vote just over a week ago, the stock has shed 2.7 percent, closing Friday at 42.39 euros. That level sits 12 percent below its 52-week high, though the shares remain up 6.6 percent since the turn of the year.

Exit Talk, and a Nordic Precedent

Speculation about a departure from Switzerland has intensified. US asset manager Artisan Partners wrote to the board urging it to leave the country in the face of the looming requirements. Management has pushed back, insisting it intends to keep operating as a global bank from Swiss soil. Finance minister Karin Keller-Sutter has likewise argued that a relocation would be both costlier and legally complicated.

Even so, the leadership is quietly working through the practical consequences of possible countermeasures. According to Bloomberg, management informally gathered lessons from Nordic lender Nordea, which moved its legal headquarters from Stockholm to Helsinki in 2018. Nordea said it had held no such discussions with its own senior managers. Internally, Bloomberg reported, a theoretical merger with a US institution such as Morgan Stanley was also floated as a route to relocating. No actual talks are underway, and the operational hurdles would be considerable: Morgan Stanley oversees roughly 7.35 trillion US dollars in client assets, against UBS's 4.66 trillion US dollars.

Deep Roots at Home

Untangling UBS from Switzerland would be no small feat. A spin-off of the domestic business would leave behind a Swiss unit with a balance sheet estimated at 350 to 400 billion Swiss francs. The bank also processes payments for around 80 percent of Swiss banks and, through its US entities, is the only Swiss lender with a direct link to the US payment system.

Meanwhile, at least eight foreign banks have signalled interest in talks about a merger or combination, according to Reuters, citing the Swiss newspaper Blick. UBS declined to comment on the speculation.

Referendum Threat and an Earnings Date

Pressure is mounting on the political front as well. The Social Democrats have announced plans to force a referendum with 50,000 signatures should parliament pass what they regard as a bank-friendly law.

For a clearer read on the operating business, investors will have to wait only a little longer. On 28 October 2026, UBS publishes its third-quarter figures. Until then, the standoff in Bern is likely to keep shaping the strategic thinking at the top of the group.