UBS says Swiss upper house plan would add $16 billion in capital

UBS said the total extra capital since the Credit Suisse takeover comes to about $33 billion.

According to swissinfo, the chamber had weighed three options: 100 per cent backing, 90 per cent backing, and a 50/50 split in which additional tier 1 (AT1) bonds would cover half.

UBS said the 90 per cent level would require UBS AG to hold about $16 billion of extra common equity tier 1 (CET1) capital. CET1 is the highest-quality capital a bank holds to absorb losses. The bank said this comes on top of about $2 billion from ordinance-level measures and about $15 billion it had already disclosed, for a total of about $33 billion of extra CET1 since the takeover of Credit Suisse.

UBS also said the measure would tighten requirements further only if it is confirmed at the end of the parliamentary process. That process is still under way. UBS said the outcome was not a compromise and did not address the root causes of the Credit Suisse collapse.

The vote moves capital rules closer to the bank's worst-case scenario. It revives uncertainty over capital requirements after the Credit Suisse merger, which has hung over the bank's planning since. Public pushback from the bank points to a longer lobbying fight in parliament before any final rule is set. Management appears to have less room to shape the outcome than it had hoped. The rule would set how much capital the bank must hold against its investment banking and international units.