Shares of UBS (UBS.US) continued to decline by 4% in pre-market trading following Switzerland’s announcement of stringent new capital requirements for the banking giant. The Swiss government has mandated that UBS must hold an additional $26 billion in core capital following its 2023 acquisition of struggling rival Credit Suisse.
The Swiss Federal Council’s regulatory proposal, which UBS has “strongly opposed,” could require up to 26 billion Swiss francs ($28.3 billion) in extra capital to align with proposed financial reforms. The bank argues that the measures would significantly impact its operations and competitiveness in global markets.
This development comes as UBS continues integrating Credit Suisse’s operations while navigating heightened regulatory scrutiny. Analysts suggest the capital requirements reflect Swiss authorities’ efforts to strengthen the financial system’s resilience following the high-profile merger.
The pre-market decline indicates investor concerns about potential dilution from capital raises or reduced profitability from higher capital buffers. UBS shares have faced pressure since completing the Credit Suisse acquisition, with regulators closely monitoring the combined entity’s stability.
Market participants will watch for further developments as UBS prepares its formal response to the proposed regulations, which could reshape Switzerland’s banking landscape if implemented. The case highlights ongoing tensions between financial stability requirements and commercial banking profitability in the post-crisis regulatory environment.
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