UBS global units must be backed by ‘hard capital’: SNB

UBS issued a 2 billion yuan (297 million USD) panda bond with a 1.78% coupon rate, the lowest for a foreign financial institution. The bank sees China's bond market as increasingly important for international funding. UBS is expanding its presence in China, increasing stakes in UBS Securities and UBS Futures. The bank aims to strengthen its investment banking, wealth, and asset management businesses in China, citing opportunities in AI and tech IPOs.

The Swiss National Bank's Vice Chairman Antoine Martin reiterated support for government banking reform proposals, urging UBS to hold more capital due to its increased size post-Credit Suisse takeover. UBS opposes the plan, citing competitiveness concerns. Lawmakers are seeking a compromise. UBS's market share grew to 25% in 2024 from 14% in 2022. The SNB views these measures as crucial for financial stability.

HSBC reported a 23% rise in first-half profit to $19.5B, beating estimates, and resumed buybacks. UBS posted a 17% profit increase to $2.8B but faces a $125M U.S. fine. HSBC raised net interest income guidance and added 640K clients. UBS announced a $3B buyback but faces regulatory and capital rule uncertainties.

Switzerland launched a public consultation on banking reforms requiring systemically important lenders, including UBS, to defer and claw back executive bonuses after misconduct. The plan would expand FINMA powers to fine banks up to 10% of annual operating income and assign clearer executive accountability. If enacted, it could start as early as 2029, alongside unresolved UBS capital rules.

Switzerland launched a public consultation on stricter bank bonus rules, aimed at improving financial stability after Credit Suisse’s 2023 collapse. Draft proposals would require long-term, risk-reducing bonus structures for systemically important lenders such as UBS, including longer deferrals, possible reductions or clawbacks for losses or misconduct, and earlier FINMA intervention. Consultation runs until Nov 19, 2026.

A Swiss parliamentary committee failed to agree on proposed new capital rules for UBS. The draft would require UBS to hold about US$20 billion more CET1 capital and fully capitalise foreign subsidiaries using CET1 only, after Credit Suisse’s 2023 collapse. UBS says this is excessive. The committee will reconvene Aug 31 for a September vote.