Swiss Finance Minister Opposes UBS Capital Rules, Potential $23B Increase Required
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Increased Capital Requirements: Swiss Finance Minister Karin Keller-Sutter opposes a proposal relying on AT1 bonds, arguing it fails to address UBS's core risks, potentially increasing the bank's capital needs by about $23 billion, which may impact its international competitiveness.
- Stock Price Fluctuation: Following the minister's comments, UBS shares dipped 1.5% in afternoon trading, reflecting market uncertainty regarding the new capital rules and their potential impact on the bank's financial health.
- Policy Support and Opposition: The Swiss People's Party supports allowing UBS to use AT1 bonds to meet part of the new capital rules, but the finance minister contends that the design of AT1s is unsuitable for this role, potentially leading to greater capital pressure on the bank.
- Regulatory Review Context: Lawmakers and regulators are assessing how much additional capital UBS should hold following its emergency acquisition of former rival Credit Suisse, highlighting ongoing concerns about banking stability and competitiveness.
Analyst Views on UBS
Wall Street analysts forecast UBS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for UBS is 45.75 USD with a low forecast of 37.61 USD and a high forecast of 60.17 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
8 Buy
2 Hold
3 Sell
Moderate Buy
Current: 47.910
Low
37.61
Averages
45.75
High
60.17
Current: 47.910
Low
37.61
Averages
45.75
High
60.17
About UBS
UBS Group AG is a Switzerland-based holding company and conducts its operations through UBS AG and its subsidiaries. The company operates as a wealth manager with focused asset management and investment banking capabilities and a capital-light and cash-generative business model. The Company comprises four business divisions: Global Wealth Management, which provides tailored advice and solutions to its clients around the globe; Personal & Corporate Banking division provides comprehensive financial products and services to private, corporate and institutional clients in Switzerland; Asset Management division offers investment capabilities and styles across all traditional and alternative asset classes, as well as advisory support to institutions; Investment Bank provides investment advice, financial solutions and capital markets access to institutional, corporate and wealth management clients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
