Shares in UBS dropped 7% on Tuesday as investors reacted to new government proposals that could force the Swiss bank to hold an additional $26 billion in core capital. Analysts voiced significant concern about the impact on UBS's plans to return cash to shareholders.
Deutsche Bank analysts noted that UBS's capital returns for 2026 and beyond remain uncertain due to these proposed rules. This market reaction underscores the gravity of the regulatory changes and their potential effect on shareholder value.
Despite UBS reaffirming its intention to return $3 billion in capital this year, the prospect of substantially higher capital requirements has created investor apprehension. The share decline reflects a direct negative impact on the bank's valuation.
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