UBS Group AG (UBS) Against Swiss Government’s New $22B Capital Requirement

UBS Group AG (NYSE:UBS) is one of Goldman Sachs top bank stocks to buy. On April 22, UBS Group AG (NYSE:UBS) reiterated it will need to hold an additional $22 billion in CET1 capital. The adjustment would be in response to the Swiss Federal Council publishing the Capital Adequacy Ordinance and submitting it to parliament.

The ordinance is expected to come into effect early next year and will require higher capital deductions for assets subject to valuation uncertainty. In addition, they would impose a three-year amortization schedule for capitalized software. The new measures would eliminate about $4 billion of net CET1 capital and could reduce UBS Group’s CET1 capital ratio by about 0.8%.

The new requirement would require UBS Group to hold additional capital of about $20 billion. Combined with $2 billion in net CET1, the total incremental capital requirement will stand at about $22 billion. Consequently, UBS Group’s de facto minimum CET1 capital ratio will be about 18.4% or 17.6% after accounting for all ordinance measures. The additional capital requirement would carry an annual cost of $3 billion.

UBS Group AG (NYSE:UBS) is a leading global financial services firm headquartered in Switzerland, recognized as the world’s largest wealth manager. It provides comprehensive wealth management, personal and corporate banking, asset management, and investment banking services to private, institutional, and corporate clients globally, following its acquisition of Credit Suisse.

READ NEXT: 8 Best Industrial Stocks to Buy in 2026 and 8 Best Rare Earth Stocks to Buy Right Now.

Disclosure: None. Follow Insider Monkey on Google News.