Latest news with #SergioErmotti
Reuters
20-05-2025
- Business
- Reuters
UBS set to face setback in Swiss capital hike, Bloomberg News reports
May 19 (Reuters) - UBS Group (UBSG.S), opens new tab is expected to face setbacks in its endeavor to dilute proposed Swiss legislation that would require maintaining up to $25 billion in additional capital, Bloomberg News reported on Monday, citing sources familiar with the matter. The Swiss government is expected to publish a draft bill in June that could mandate the Swiss bank to strengthen its loss-absorption capacity, requiring it to cover losses up to 100% of the capital at its foreign units, the report added. UBS declined to comment, while the Swiss government did not immediately respond to request for comment. Since its 2023 emergency takeover of Credit Suisse, which left it as Switzerland's only globally systematically important bank, UBS has faced growing pressure. The government and regulators are now considering tougher capital rules to safeguard the financial system and increase the bank's robustness. UBS executives, however, say that excessive capital requirements could hamper its competitiveness and undermine the attractiveness of Switzerland's financial sector. The draft legislation is not final, as the Swiss Federal Council may still suggest changes, the report noted. Earlier on Monday, UBS CEO Sergio Ermotti warned that stricter regulation in the Swiss banking sector could ultimately benefit foreign competitors.
Yahoo
20-05-2025
- Business
- Yahoo
UBS Set to Lose First Round of Fight Over Swiss Capital Hike
(Bloomberg) -- UBS Group AG is heading for defeat in the first round of its effort to water down the Swiss government's law that could force it to maintain as much as $25 billion in extra capital. America, 'Nation of Porches' NJ Transit Train Engineers Strike, Disrupting Travel to NYC NJ Transit Makes Deal With Engineers, Ending Three-Day Strike NYC Commuters Brace for Chaos as NJ Transit Strike Looms In the bill the government will propose to parliament — an outline of which is set to be published on June 6 — the Zurich-based bank would be required to increase its ability to cover losses at foreign subsidiaries to 100% of the capital in those units, according to two people familiar with the matter. The text is not final and the Federal Council, the equivalent of a cabinet in Switzerland, could still request changes, the people said. A spokesperson for the Swiss government declined to comment. While the potential for a full backing has been floated by the regulator Finma since last year, the government has yet to confirm its preferred level. The stance comes in spite of strong efforts by UBS executives including Chief Executive Officer Sergio Ermotti to push back against it, with bankers arguing they would be at a major disadvantage to global peers. The outline law is also set to contain other broad-ranging proposals to strengthen banking regulation in Switzerland, and comes as part of the response to the collapse of Credit Suisse in 2023. UBS, which took over its stricken rival in a government-backed rescue, is now facing the higher capital requirements on account of its increased size and complexity. The issue of 'backing' capital in foreign subsidiaries stems from the nature of UBS's corporate structure — and also formerly that of Credit Suisse — in which many of its foreign units are still part of a core 'parent' entity that sits below the listed holding company in the group's structure. A downside of the arrangement is that businesses can't easily be fenced off, or sold, in times of turbulence without torpedoing the capital of the parent bank. So the regulators — Finma and the Swiss National Bank — have come up with the idea of forcing UBS to match the entire capital held in the subsidiaries with capital held at the parent bank, up from 60% currently. The proposed law may take until 2029 to come into force, while separate technical rules are in the works that could be implemented sooner. UBS has begun to consider the effect on its business, with some internal scenarios even gaming out moving the bank's headquarters away from Switzerland. The bank also has a long period to lobby lawmakers, potentially influencing the outcome. The expected capital demand will however more quickly affect how much cash the bank can return to investors, and even its merger and acquisition activity. The unpredictable situation is already weighing on its share price. Draft legislation will be produced from the outline for broad consultation by the first half of 2026, with parliamentary debates to be held in 2027 and then voted on, probably by the end of that year. Lawmakers could send the proposal back to the government, forcing it to submit a new draft. There's the potential for further delay as Swiss democracy allows for any bill passed by parliament to be challenged in a referendum if enough signatures are collected. Such a plebiscite could take place in 2028, in which case the law would most likely be implemented in 2029 unless voters reject it. --With assistance from Noele Illien. (Updates with chart.) Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race ©2025 Bloomberg L.P.
Yahoo
20-05-2025
- Business
- Yahoo
UBS Set to Lose First Round of Fight Over Swiss Capital Hike
(Bloomberg) -- UBS Group AG is heading for defeat in the first round of its effort to water down the Swiss government's law that could force it to maintain as much as $25 billion in extra capital. America, 'Nation of Porches' NJ Transit Train Engineers Strike, Disrupting Travel to NYC NJ Transit Makes Deal With Engineers, Ending Three-Day Strike NYC Commuters Brace for Chaos as NJ Transit Strike Looms In the bill the government will propose to parliament — an outline of which is set to be published on June 6 — the Zurich-based bank would be required to increase its ability to cover losses at foreign subsidiaries to 100% of the capital in those units, according to two people familiar with the matter. The text is not final and the Federal Council, the equivalent of a cabinet in Switzerland, could still request changes, the people said. A spokesperson for the Swiss government declined to comment. While the potential for a full backing has been floated by the regulator Finma since last year, the government has yet to confirm its preferred level. The stance comes in spite of strong efforts by UBS executives including Chief Executive Officer Sergio Ermotti to push back against it, with bankers arguing they would be at a major disadvantage to global peers. The outline law is also set to contain other broad-ranging proposals to strengthen banking regulation in Switzerland, and comes as part of the response to the collapse of Credit Suisse in 2023. UBS, which took over its stricken rival in a government-backed rescue, is now facing the higher capital requirements on account of its increased size and complexity. The issue of 'backing' capital in foreign subsidiaries stems from the nature of UBS's corporate structure — and also formerly that of Credit Suisse — in which many of its foreign units are still part of a core 'parent' entity that sits below the listed holding company in the group's structure. A downside of the arrangement is that businesses can't easily be fenced off, or sold, in times of turbulence without torpedoing the capital of the parent bank. So the regulators — Finma and the Swiss National Bank — have come up with the idea of forcing UBS to match the entire capital held in the subsidiaries with capital held at the parent bank, up from 60% currently. The proposed law may take until 2029 to come into force, while separate technical rules are in the works that could be implemented sooner. UBS has begun to consider the effect on its business, with some internal scenarios even gaming out moving the bank's headquarters away from Switzerland. The bank also has a long period to lobby lawmakers, potentially influencing the outcome. The expected capital demand will however more quickly affect how much cash the bank can return to investors, and even its merger and acquisition activity. The unpredictable situation is already weighing on its share price. Draft legislation will be produced from the outline for broad consultation by the first half of 2026, with parliamentary debates to be held in 2027 and then voted on, probably by the end of that year. Lawmakers could send the proposal back to the government, forcing it to submit a new draft. There's the potential for further delay as Swiss democracy allows for any bill passed by parliament to be challenged in a referendum if enough signatures are collected. Such a plebiscite could take place in 2028, in which case the law would most likely be implemented in 2029 unless voters reject it. --With assistance from Noele Illien. (Updates with chart.) Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Zawya
20-05-2025
- Business
- Zawya
UBS set to face setback in Swiss capital hike, Bloomberg News reports
UBS Group is expected to face setbacks in its endeavor to dilute proposed Swiss legislation that would require maintaining up to $25 billion in additional capital, Bloomberg News reported on Monday, citing sources familiar with the matter. The Swiss government is expected to publish a draft bill in June that could mandate the Swiss bank to strengthen its loss-absorption capacity, requiring it to cover losses up to 100% of the capital at its foreign units, the report added. UBS and the Swiss government did not immediately respond to requests for comment, and Reuters could not immediately verify the report. Since its 2023 emergency takeover of Credit Suisse, which left it as Switzerland's only globally systematically important bank, UBS has faced growing pressure. The government and regulators are now considering tougher capital rules to safeguard the financial system and increase the bank's robustness. UBS executives, however, say that excessive capital requirements could hamper its competitiveness and undermine the attractiveness of Switzerland's financial sector. The draft legislation is not final, as the Swiss Federal Council may still suggest changes, the report noted. Earlier on Monday, UBS CEO Sergio Ermotti warned that stricter regulation in the Swiss banking sector could ultimately benefit foreign competitors.
Reuters
19-05-2025
- Business
- Reuters
UBS CEO Ermotti steps up warnings on risk of excessive regulation
BUERGENSTOCK, Switzerland, May 19 (Reuters) - UBS (UBSG.S), opens new tab CEO Sergio Ermotti said on Monday that stricter regulation in the Swiss banking sector would benefit foreign competitors as he stepped up warnings on the risks of saddling the country's largest bank with excessive capital requirements. UBS is awaiting details of the Swiss government's plan to make the banking sector safer, following the demise of Credit Suisse, which UBS acquired in 2023 after its longstanding rival collapsed following a string of scandals. The government wants to make UBS hold more capital to make it more robust. UBS executives say excessive capital requirements will make it harder to compete and could threaten the attractiveness of Switzerland's financial sector. Speaking at the Digital Gipfel Schweiz 2025 event at the Buergenstock resort overlooking Lake Lucerne, Ermotti said incoming Swiss regulation could have serious repercussions. "The only thing I know that out of this debate, if it goes (through), there's not going to be a winner in Switzerland. The winners will be our competitors outside Switzerland," he said, forecasting that they would be celebrating. At the heart of the debate are proposals by Swiss authorities to make UBS fully capitalize its foreign units, though it remains to be seen how many billions of dollars in additional capital UBS may need to hold. "I mean, the top end of the debate is 20 plus 20, I would call it, rather more than 40 billion of additional capital, which of course, is not something that we can bear in terms of (remaining) a competitive global bank," Ermotti said. "So we are looking at what's going on. At the end of the day, the parliament should make a decision." Ermotti said Switzerland needs a level playing field for corporate implementation of new technology and that UBS wants to be at the forefront of this drive.
