Switzerland Moves to Tighten Capital Rules on UBS Group
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16h ago
0mins
Source: seekingalpha
- Increased Capital Needs: The Swiss finance ministry's plan mandates UBS to fully capitalize its foreign subsidiaries through its Swiss unit, which is expected to raise the bank's capital requirements by approximately $23 billion, significantly impacting its financial health.
- Strong Political Backing: Despite concerns about competitiveness, the Swiss government believes that political support for tougher capital safeguards post-Credit Suisse crisis outweighs these worries, indicating a firm policy direction.
- Slow Legislative Process: The relevant legislation is expected to be submitted to parliament by 2027, while UBS anticipates it will take seven years to implement the estimated $23 billion capital requirement, highlighting the complexity and timeline of the reforms.
- Signals of Flexibility: The Swiss government is showing flexibility in reforms targeting intangible capital, potentially increasing capital requirements by about $3 billion without parliamentary approval, further affecting UBS's capital structure.
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: 49.250
Low
37.61
Averages
45.75
High
60.17
Current: 49.250
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.
