A Swiss parliamentary economic committee has endorsed a compromise that would allow UBS to satisfy up to 50% of its new capital requirements using AT1 hybrid bonds rather than pure equity. The committee's position pushes back against Finance Minister Karin Keller-Sutter, who had favored a stricter capital framework. The proposal still faces further legislative steps before becoming binding policy.
Filling capital buffers with AT1 bonds instead of common equity means UBS faces less pressure to dilute existing shareholders or cut capital returns. For holders of UBS stock, this reduces the near-term overhang of a forced equity raise. AT1 bondholders face a more complex picture: greater issuance volume could widen spreads on existing instruments.
Swiss full parliament vote on the capital framework (date not yet confirmed). Next UBS quarterly results, Q2 2025, expected late July 2025.
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