UBS stock prices declined by 7% on Tuesday after analysts predicted that new Swiss capital requirements would make it difficult for the bank to distribute cash to investors.
The Swiss government introduced a $26 billion capital requirement for UBS as part of their measures to prevent another financial disaster like Credit Suisse’s collapse. The stock price increased at first after the proposal announcement but reversed direction on Tuesday because investors became concerned about the impact on share buyback programs.
The Deutsche Bank analysts stated that the capital returns for 2026 and beyond are now uncertain while UBS maintained its plan to return $3 billion to investors during this year. The analysts at JP Morgan reduced their buyback predictions to $3.5 billion for 2026 instead of $6 billion and $4 billion for 2027 instead of $8 billion.
JP Morgan stated in their note that we already factor in the worst-case scenario. The stock price of UBS declined by 6.6% to 26 francs during midday trading in Zurich which would result in its largest daily drop since February.
The situation demonstrates how UBS must navigate between regulatory requirements and investor expectations while facing increased global banking sector scrutiny.
