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UBS might need to retain $10 billion to $15 billion in excess capital after Switzerland's government this week laid out plans for tougher capital requirements for the enlarged lender, Autonomous Research estimated on Thursday. In its base case, UBS would need 200 to 300 basis points more in common equity tier 1 ratio (CET1 ratio), a measure of a bank's resilience, which "would require the retention of around $10-15 billion incremental CET1 capital in coming years," banks analyst Stefan Stalmann wrote in a note to clients. In a worse case "headwind", UBS would face up to 700 basis points more for its CET1 ratio, Stalmann said, although he cautioned that his estimates were based in part on guesswork because the Swiss government had not quantified the extra capital it believed the enlarged UBS would need to hold.

Noele illienTommy reggiori wilkesStefan stalmannChris reeseCredit suisseAutonomous research