UBS Group (UBS) is considering a shift away from Switzerland after regulators proposed tougher rules, according to a New York Post report. The plan would force the bank to raise its capital base by $26 billion, a level UBS says is excessive and out of step with other markets. Leaders warn that the change could hurt its ability to compete with rivals in the United States and Europe.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The stricter rules came after UBS took over Credit Suisse in 2023. That rescue was intended to prevent a broader crisis in Swiss finance. Since then, leaders in Zurich have pushed for higher cushions against losses. UBS has stated it is working with regulators to reduce the increase. Meanwhile, UBS shares dropped 0.42% on Friday, but recouped 0.64% in after-hours trading.
Looking Toward the United States
At the same time, UBS leaders have met with U.S. officials under the Trump administration. The talks include options to move the bank’s main base from Zurich to the United States. UBS could buy or merge with a mid-sized U.S. bank to build a larger footprint.
Analysts point to PNC Financial Services (PNC) and Bank of New York Mellon (BK) as possible targets. PNC has a market value of nearly $79 billion, while Bank of New York Mellon is close to $74 billion. In comparison, UBS has a market value of about $126 billion. This size could give UBS a strong hand in a deal that reshapes the U.S. banking scene.
If UBS relocates, it would still be subject to rules as a systemically important bank. Yet U.S. limits on deals are not as tight as in Switzerland. For instance, JPMorgan Chase (JPM) cannot make big new purchases because of its deposit share. UBS would not face that same cap.
What It Means for Investors
A full move to the United States would mark one of the largest shifts by a European bank in years. For Switzerland, losing UBS would hit its place as a global financial center. For U.S. markets, it could create a new rival in wealth, custody, and capital services.
What Is UBS’s Stock Price Target?
On the Street, UBS boasts a Moderate Buy consensus rating. The average UBS stock price target is $42.44, implying a 4.20% upside from the current price.
