Swiss Senate Backs 90% CET1 Requirement for UBS Foreign Subsidiaries

Has the 90% CET1 requirement become law?

No. The Senate approved the 90% CET1 approach by 29 votes to 16, but the legislation must still go through Switzerland's lower house.

Orbitrum Investor Impact

Does 90% mean UBS must fund 90% of all its assets with common equity?

No. The proposal concerns the Swiss parent company's capital backing for the carrying value of its foreign subsidiaries, not a 90% group-wide CET1 ratio.

Why does the 90% requirement matter for UBS?

UBS estimates the proposal could require about $18 billion of additional CET1 capital, reducing the bank's flexibility to deploy capital elsewhere. UBS had supported an alternative allowing 50% CET1 and 50% Additional Tier 1 capital.

Could the proposal affect UBS shareholders?

Potentially. UBS has already said the amount and pace of its share repurchases depend partly on visibility around Parliament's treatment of foreign subsidiaries, so a larger CET1 requirement could constrain future capital returns.

What happens next?

The bill now moves to Switzerland's lower house, and Reuters reported that a final decision is most likely in 2027. The 90% requirement could still change during the legislative process, and a referendum is also possible.