UBS exploring options abroad if Swiss rules prove intolerable, sources say
UBS•UBS is reviewing scenarios including moving its headquarters or merging with another bank if Switzerland adopts rules it considers excessively strict, according to three people familiar with the matter. No active talks are underway, and the proposed capital requirement was reduced from 100% to 90%.
1. Options under review
UBS is considering possible responses to Switzerland’s proposed banking rules, including shifting its headquarters or merging with another bank, according to three people familiar with the matter. The scenarios also include identifying smaller U.S. banks it could potentially buy, as well as the possibility of UBS itself being taken over. The sources said there are no active talks.
2. Capital requirements
The Swiss government’s proposal would require UBS to back its foreign units with 100% Common Equity Tier 1 capital, which could tie up more than $20 billion. The upper house reduced the requirement to 90% last month, but UBS also regards that level as excessively high. The bank currently needs to capitalize its foreign units at 60%, a portion of which can be met with cheaper capital.
3. UBS says it wants to stay
UBS said it would not comment on speculation or views expressed on the matter and has repeatedly said it wishes to remain Swiss. People familiar with the bank’s thinking said Morgan Stanley would be the best theoretical match, but UBS has stated it is not planning to move. UBS Chairman Colm Kelleher said last month the bank might need to consider its future in Switzerland if the rules were too harsh.
