UBS Falls as Concerns Rise Over Capital Requirements

UBS shares fell 2.6% to 43.12 Swiss francs after a Swiss parliamentary committee's decision on capital requirements for foreign branches raised investor concerns about the bank's financial resilience.

The committee voted 10-2 to require UBS to cover 50% of its capital requirements with CET1 shares, with the remaining 50% available through AT1 bonds. This is less stringent than the Swiss government's proposal for 100% CET1 coverage, but still represents a regulatory burden for the bank.

Despite this, Jefferies maintained its "buy" recommendation on the stock with a target price of 60 francs, suggesting the impact of the new requirements has lessened. UBS's slightly weak quarterly results, with earnings per share at 0.70 francs compared to expectations of 0.73 francs, also added to the pressure.

The stock's decline also comes amid a negative climate for global markets, with the S&P 500, Dow Jones and NASDAQ all falling, further intensifying pressure on global bank stocks.