UBS Shares Slide as Swiss Capital Plan Raises Concerns
UBS shares fell sharply on Tuesday, dropping over 7% by mid-morning in Zurich. The selloff followed new Swiss government proposals that would require the bank to hold an additional $26 billion in capital.
Investors fear the move could impact future stock buybacks and dividend payouts.
The stock had gained after Friday’s announcement, which aimed to strengthen the financial system. However, those gains reversed as fresh doubts emerged over UBS’s long-term capital strategy.
Analysts Divided Over Impact on Buybacks
Deutsche Bank warned that UBS’s capital return outlook past 2026 remains uncertain. The note came Monday while Swiss markets were closed. UBS’s ability to return cash to investors, they said, might be at risk.
Citi analysts offered a more positive take. They believe the bank can absorb the capital hike without slashing shareholder returns.
Net Interest Income Still Pressures UBS Earnings
Even with manageable capital demands, Citi flagged another issue. UBS continues to trail rivals in earnings momentum, mainly due to weak net interest income.
Citi also reminded investors that the proposals still face consultation and legislative review. Final outcomes may change before implementation.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
