STOCK TITAN
  1. Home
  2. Sec-filings
  3. UBS
  4. [6-K] UBS Group AG Current Report (Foreign Issuer)

Swiss rules add USD 37bn CET1 burden for UBS (NYSE: UBS)

Filing Impact
(Neutral)
Filing Sentiment
(Neutral)
Form Type
6-K

Rhea-AI Filing Summary

UBS Group outlines major potential effects from new Swiss capital rules and proposed changes to the treatment of foreign subsidiaries. Changes to the Capital Adequacy Ordinance will shorten the capital life of software to three years and increase prudential valuation deductions, which UBS estimates will eliminate about USD 4bn of net CET1 capital at Group level and lower its CET1 ratio by roughly 0.8 percentage points.

Separately, a proposal to fully deduct foreign participations from UBS AG’s CET1, phased in over seven years, would require about USD 20bn of additional CET1. Together with around USD 15bn of previously communicated incremental capital linked to the Credit Suisse acquisition, UBS calculates total extra CET1 needs of about USD 37bn, with an annual capital cost of around USD 3bn. UBS describes the package as extreme, warns of economic consequences for Switzerland, but maintains its 2026 targets for an underlying return on CET1 capital of around 15% and a cost/income ratio below 70%, and says it remains committed to planned 2026 capital returns.

Positive

  • None.

Negative

  • UBS expects to need around USD 37bn in additional CET1 capital in total, with an estimated USD 3bn annual capital cost, significantly raising its capital burden and depressing returns.
  • Changes to Swiss capital rules are estimated to eliminate about USD 4bn of UBS’s net CET1 capital and reduce its Group CET1 ratio by roughly 0.8 percentage points, weakening reported capital metrics.

Insights

Swiss proposals materially raise UBS’s capital needs and ongoing capital costs.

The announcement describes how revised Swiss rules would increase required CET1 capital and reduce UBS’s reported capital ratios. Full deduction of foreign participations at UBS AG would add about USD 20bn to CET1 needs, on top of existing post–Credit Suisse requirements.

UBS estimates that, including a USD 2bn net CET1 impact from Capital Adequacy Ordinance changes, incremental CET1 of about USD 22bn at UBS AG would imply a de facto minimum Group CET1 ratio near 18.4%, then around 17.6% after derecognition effects. The bank also cites a study suggesting Swiss GDP could cumulatively fall by up to CHF 34 billion over ten years.

UBS expects to hold roughly USD 37bn in additional CET1 overall, with annual capital costs of about USD 3bn. The bank maintains 2026 profitability and efficiency targets and planned 2026 capital returns, while signaling it will evaluate measures to protect shareholders and mitigate potential impacts on clients and employees.

CET1 eliminated by CAO changes USD 4bn net CET1 Group level impact once fully implemented
CET1 ratio reduction 0.8 percentage points Decrease in UBS Group CET1 ratio from CAO changes
UBS AG CET1 impact USD 2bn Net CET1 capital impact at UBS AG standalone
Foreign participations CET1 USD 20bn Additional CET1 required if foreign participations fully deducted
Incremental CET1 at UBS AG USD 22bn Including USD 2bn CAO impact related to Credit Suisse acquisition
De facto CET1 ratio before derecognition 18.4% UBS Group AG consolidated, with incremental CET1 requirements
De facto CET1 ratio after derecognition 17.6% Group ratio after derecognizing around USD 4bn CET1
Total additional CET1 required USD 37bn Combined new Swiss measures and prior Credit Suisse-related capital
Annual capital cost USD 3bn per year Estimated cost of holding around USD 37bn additional CET1
Estimated Swiss GDP loss CHF 34 billion Cumulative 10-year GDP impact from foreign participation deduction study
Capital Adequacy Ordinance (CAO) regulatory
"the Swiss Federal Council published its final Capital Adequacy Ordinance (CAO) specifying the regulatory capital treatment"
A capital adequacy ordinance (CAO) is a regulatory rule that requires banks and other financial firms to hold a minimum cushion of capital to absorb losses and keep the institution solvent. Investors care because the size and quality of that cushion affect a firm’s safety, its ability to lend or grow, and its capacity to pay dividends or buy back shares — like a seatbelt that reduces the chance of a crash having catastrophic financial consequences.
Common Equity Tier 1 (CET1) capital financial
"The amendments announced today, once fully implemented, are expected to eliminate approximately USD 4bn of net CET1 capital"
Common Equity Tier 1 (CET1) capital is a bank’s highest-quality capital — mainly ordinary shares and retained profits after straightforward deductions — that serves as the primary cushion against losses. Investors use the CET1 ratio (CET1 capital compared with the bank’s risk-weighted assets) as a quick gauge of a bank’s resilience: a bigger cushion means the bank is better able to absorb shocks, support lending, pay dividends, and withstand downturns, much like a thicker shock absorber in a car.
Additional Tier 1 (AT1) capital instruments financial
"Regarding Additional Tier 1 (AT1) capital instruments, the Federal Council has decided not to proceed with the proposed adjustments"
Additional Tier 1 (AT1) capital instruments are long-term securities banks sell to strengthen their financial cushion; they act like shock absorbers that absorb losses if a bank’s capital falls too low. For investors, AT1s pay higher interest than ordinary bonds but carry the risk that payments can be skipped, the principal reduced, or the holding converted into shares when regulators or a preset trigger decide the bank needs extra support, so they trade off higher yield for higher loss risk.
prudential valuation adjustments financial
"prudential valuation adjustments will be revised, resulting in higher capital deductions for assets and liabilities"
Prudential valuation adjustments are conservative reductions applied to the reported market value of assets to add a safety margin for measurement and market risk, like shaving a bit off a home appraisal to be extra cautious. They matter to investors because they lower reported asset values and can shrink regulatory capital or reserves, which affects a firm’s perceived financial strength, dividend capacity and stock valuation.
foreign participations regulatory
"investments in foreign participations would be fully deducted from UBS AG’s standalone CET1 capital"
underlying return on CET1 capital financial
"UBS Group AG maintains its target of achieving an underlying return on CET1 capital of around 15%"
Form 6-K: How Foreign Companies Report to the SEC →
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: April 22, 2026
UBS Group AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive offices)
Commission File Number: 1-15060
Indicate by check mark whether the registrants file or will file annual reports under cover of Form
20-F or Form 40-
F.
Form 20-F
☒
Form 40-F
☐
This Form 6-K consists of the news releases which appear immediately following this page.
newsrelease6k20260422p3i0
Investor Relations
Tel. +41-44-234
41 00
Media Relations
Tel. +41-44-234
85 00
UBS Group AG and UBS AG, News Release, 22 April 2026
Page 1
22 April 2026
Ad hoc announcement pursuant to article 53 of the SIX Exchange Regulation Listing Rules
News release
UBS statement on regulatory capital announcements made by the Swiss
government
Zurich, 22 April 2026 – Earlier today, the Swiss Federal Council published its final Capital Adequacy Ordinance
(CAO) specifying the regulatory capital treatment of select assets for banks headquartered in Switzerland.
As well as publishing the final CAO, the Federal Council also submitted to parliament its final proposal for
amendments to the Banking Act that governs the capital treatment of foreign participations of systemically
important banks. This proposal will now be deliberated by parliament in the normal course of business.
UBS continues to strongly disagree with the proposed package, which is extreme, lacks international
alignment and disregards concerns of the majority of respondents to the government’s consultations. If
adopted, the proposed measures would have far-reaching
consequences for the Swiss economy.
The materials published by the Swiss government today contain assertions that we believe to be misleading.
Considering UBS has just received this information, we are in the process of thoroughly evaluating all
documents and statements made during the Federal Council’s press conference. We will provide additional
comments at the latest with our results for the first quarter of 2026, which will be published on 29 April
2026.
Capital impact from the changes to the Capital Adequacy Ordinance
Under the new ordinance, UBS’s capitalized software will be subject to an amortization schedule of no more
than three years for capital purposes, regardless of economic useful life. In addition, prudential valuation
adjustments will be revised, resulting in higher capital deductions for assets and liabilities that are subject to
valuation uncertainty.
The treatment of deferred tax assets arising from temporary differences remains
unchanged and aligned with international regulation.
Regarding Additional Tier 1 (AT1) capital instruments, the Federal Council has decided not to proceed with
the proposed adjustments to AT1 capital instruments for the time being, as it considers it more appropriate
to
await the international developments that are currently under way in this area.
Based on today’s publication, the changes to prudential valuation adjustments will become effective on
1 January 2027, while the changes to the capital treatment of capitalized software must be implemented by
1 January 2029. The amendments announced today, once fully implemented, are
expected to eliminate
approximately USD 4bn of net CET1 capital at the Group (consolidated) level. This would reduce the CET1
capital ratio at UBS Group by around 0.8 percentage points. At UBS AG standalone, the net CET1 capital
impact is estimated at approximately USD 2bn.
newsrelease6k20260422p3i0
Investor Relations
Tel. +41-44-234
41 00
Media Relations
Tel. +41-44-234
85 00
UBS Group AG and UBS AG, News Release, 22 April 2026
Page 2
Estimated incremental capital from proposed changes to the regulatory treatment of foreign
participations
Under the proposal relating to foreign participations that will now proceed through the parliamentary
process, investments in foreign participations would be fully deducted from UBS AG’s standalone CET1capital.
The proposal provides that the amendments would be phased in over seven years, assuming no delays during
the parliamentary deliberations, starting with a 65% deduction requirement in the first year and increasing to
100% by 5-percentage-point increments each year.
The full deduction of investments in foreign subsidiaries would require UBS AG to hold additional CET1
capital of around USD 20bn.
Estimated overall capital impact of Credit Suisse acquisition
When including the USD 2bn net CET1 impact from the amendments to the CAO, the total incremental CET1
capital of around USD 22bn required at UBS AG would result in a de facto minimum CET1 capital ratio at the
UBS Group AG (consolidated) level of around 18.4%.
At Group level, including the derecognition of around USD 4bn of net CET1 capital from the CAO measures
related to capitalized software and prudential valuation adjustments, the CET1 capital ratio would decrease
the aforementioned 18.4% to around 17.6%. This would contribute to a further underrepresentation of
UBS’s capital strength compared to its peers.
These estimates have been calculated based on our balance sheet at 31 December 2025, assuming that all
capital measures are adopted as currently proposed and using an assumed CET1 capital ratio of 12.5% for
UBS AG and 14.0% for UBS Group as a starting point as previously disclosed.
The Federal Council’s stated pro-forma CET1 capital ratio for UBS of 15.5% and the accompanying peer
comparison are misleading, requiring further clarification.
The incremental capital of USD 22bn mentioned above would be in addition to the previously communicated
incremental capital of around USD 15bn that UBS must hold as a result of the acquisition of Credit Suisse to
meet existing regulations. This includes around USD 9bn to remove the regulatory concessions granted to
Credit Suisse and around USD 6bn to meet the current progressive requirements
due to the increased size
and higher market share of the combined business.
As a result, UBS would be required to hold around USD 37bn in additional CET1 capital in total, with an
annual capital cost of around USD 3bn.
Impact assessment for the broader Swiss economy
The Federal Council’s mandatory regulatory impact assessment for the proposed banking regulation remains
insufficient in both scope and methodology to serve as a sound basis for evaluating the potentially far-
reaching consequences for the Swiss economy as a whole.
A recent study by independent Swiss economic research institute BAK Economics used its established
macroeconomic model to quantify the significant and permanent effects of the proposed full deduction of
foreign participations from CET1 capital. According to the study,
the impact on borrowing costs and credit
supply from this specific regulatory change could result in cumulative losses in Switzerland’s gross domestic
product of up to CHF 34 billion over a ten-year period, alongside lasting declines in investment, employment,
and tax revenues.
newsrelease6k20260422p3i0
Investor Relations
Tel. +41-44-234
41 00
Media Relations
Tel. +41-44-234
85 00
UBS Group AG and UBS AG, News Release, 22 April 2026
Page 3
Targets
and capital returns
As none of the regulatory changes are expected to become effective before 2027, UBS Group AG maintains
its target of achieving an underlying return on CET1 capital of around 15% and an underlying cost/income
ratio of <70% by the end of 2026 (both on an exit rate basis).
UBS remains committed to its planned 2026 capital returns.
UBS remains committed to its business model and to contributing to fact-based deliberations
UBS remains committed to its diversified business model and unique regional footprint, as the largest truly
global wealth manager and leading bank in Switzerland, with targeted, competitive investment bank and
asset management capabilities.
UBS already operates with strong capital buffers, and Switzerland’s existing capital framework is among the
most stringent globally. The CAO
and the proposed capital treatment of foreign participations would further
increase these requirements. UBS looks to the parliamentary deliberation process in connection with the
proposed treatment of foreign participations to take account of the concerns raised by many stakeholders
during the democratic consultation process. In particular,
stakeholders have highlighted the material
economic harm to households and corporates in Switzerland and the importance of maintaining a strong,
internationally competitive financial center. UBS will continue to contribute facts and analysis that support
informed decision-making.
In parallel, UBS will continue to evaluate appropriate measures to protect the interest of its shareholders while
mitigating the impact, if possible, on its clients and employees.
UBS Group AG and UBS AG
Investor contact
Switzerland:
+41-44-234 41 00
Media contact
Switzerland:
+41-44-234 85 00
UK:
+44-207-567 47 14
Americas:
+1-212-882 58 58
APAC:
+852-297-1 82 00
www.ubs.com/media
This
Form
6-K
is
hereby
incorporated
by
reference
into
(1)
each
of
the
registration
statements
on
Form
F-3
(Registration Numbers 333-283672 and
333-293403), and on Form S-8
(Registration Numbers 333-200634; 333-
200635;
333-200641;
333-200665;
333-215254;
333-215255;
333-228653;
333-230312;
333-249143
and
333-
272975),
and
into
each
prospectus
outstanding
under
any
of
the
foregoing
registration
statements,
(2)
any
outstanding offering circular or
similar document issued or
authorized by UBS AG that
incorporates by reference
any Forms
6-K of
UBS AG
that are
incorporated into
its registration
statements filed
with the
SEC, and
(3) the
base prospectus
of Corporate
Asset Backed
Corporation (“CABCO”)
dated June
23, 2004
(Registration Number
333-111572),
the
Form
8-K
of
CABCO
filed
and
dated
June
23,
2004
(SEC
File
Number
001-13444),
and
the
Prospectus
Supplements
relating
to
the
CABCO
Series
2004-101
Trust
dated
May
10,
2004
and
May
17,
2004
(Registration Number 033-91744 and 033-91744-05).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused
this report to be signed on their behalf by the undersigned, thereunto duly authorized.
UBS Group AG
By: _/s/ David Kelly______________
Name:
David Kelly
Title:
Managing Director
By: _/s/ Ella Copetti-Campi_________
Name:
Ella Copetti-Campi
Title:
Executive Director
UBS AG
By: _/s/ David Kelly______________
Name:
David Kelly
Title:
Managing Director
By: _/s/ Ella Copetti-Campi________
Name:
Ella Copetti-Campi
Title:
Executive Director
Date: April 22, 2026

Source: View Original Filing on SEC EDGAR

FAQ

How much additional CET1 capital could UBS (UBS) be required to hold under the Swiss proposals?

UBS estimates it would need about USD 37bn in extra CET1 capital overall. This combines around USD 22bn from new Swiss measures with roughly USD 15bn previously linked to the Credit Suisse acquisition and existing regulations.

What is the impact of the new Capital Adequacy Ordinance on UBS’s CET1 capital and ratio?

UBS expects the ordinance changes to eliminate approximately USD 4bn of net CET1 capital at Group level. Management estimates this would lower the UBS Group CET1 capital ratio by about 0.8 percentage points once fully implemented.

How would the proposed treatment of foreign participations affect UBS AG’s capital needs?

The proposal would fully deduct UBS AG’s investments in foreign participations from standalone CET1, phased in over seven years. UBS estimates this would require additional CET1 capital of around USD 20bn at UBS AG when fully applied.

What de facto CET1 capital ratios does UBS project under the new Swiss capital framework?

Including about USD 22bn of incremental CET1 at UBS AG, UBS calculates a de facto minimum Group CET1 ratio of around 18.4%. After derecognizing roughly USD 4bn of CET1, the ratio would be about 17.6% on a Group basis.

Does UBS plan to change its 2026 financial targets or capital returns after these Swiss proposals?

UBS states it is maintaining its 2026 targets, including an underlying return on CET1 capital of around 15% and an underlying cost/income ratio below 70%. The bank also says it remains committed to its planned 2026 capital returns.

What broader economic impact does UBS cite from the proposed Swiss capital rules?

UBS references a BAK Economics study indicating cumulative Swiss GDP losses of up to CHF 34 billion over ten years. The study links this to higher borrowing costs and constrained credit supply from fully deducting foreign participations from CET1 capital.