Full Breakdown
Artisan Partners Urges UBS to Leave Switzerland Over New Capital Rules
By Drooid · · How we work
Core Event
On October 1, Artisan Partners — a U.S. asset manager that holds about 60 million UBS shares (roughly 1.8 % of the bank’s outstanding stock) — sent a letter to UBS’s board urging the lender to relocate its headquarters out of Switzerland. The firm argues that the Swiss parliament’s proposal to raise the bank’s Common Equity Tier 1 (CET1) capital ratio to 90 % would force UBS to hold an additional $16 billion of capital that would generate no return for shareholders.
Background & Context
The proposal follows the 2023 collapse of Credit Suisse and a subsequent overhaul of Swiss banking regulation. Switzerland’s upper house approved the 90 % CET1 requirement for UBS’s foreign subsidiaries, and the measure now moves to the lower house, where it could be softened. The change would increase UBS’s required CET1 from roughly $56 billion to $72 billion.
Data & Statistics
- Shareholding: Artisan’s managed accounts own more than 60 million UBS shares, about 1.8 % of total shares.
- Capital impact: The proposed rule would add $16 billion of CET1 capital.
- Opportunity cost: Artisan estimates that, if deployed in a jurisdiction with less stringent rules, the $16 billion could earn a 15 % return, producing roughly $2.4 billion of additional net income.
- Market-value loss: At a 15-times earnings multiple, the foregone income translates to an estimated $36 billion loss in market capitalisation, or about 23 % of UBS’s current valuation.
Official Statements & Responses
The bank also noted that its own estimate of the capital impact aligns with the $16 billion figure. Swiss Finance Minister Karin Keller-Sutter said she believes it is unlikely that UBS will relocate, downplaying the shareholder’s call.
Verbatim Quotes
- “The simple fact is that Switzerland is no longer an attractive or desirable location for UBS,” — Artisan, US asset manager.