UBS: Artisan Partners Calls on the Bank to Leave Switzerland

Context

At a Glance

• Artisan Partners is calling on UBS to leave Switzerland
• The two funds manage over 60 million UBS shares
• UBS’s CET1 capital would rise from $56 billion to $72 billion
• The National Council will now review the proposal

Key Facts

• Entity → Artisan Partners
• Managed stake → over 60 million UBS shares
• Share of capital → over 1.8%
• Calculated CET1 capital → from $56 billion to $72 billion
• Market value lost → $36 billion, approximately 23%
• Coverage of foreign subsidiaries → 45% today, 90% by the cantons, 100% by the Federal Council

Artisan Partners’ Request

Over 60 million UBS shares are at the center of the letter in which Artisan Partners asked Switzerland’s largest bank to leave the country. The Global Value and International Value teams manage these shares on behalf of their clients: the stake exceeds 1.8% of UBS’s share capital.

The news was reported by Keystone-ATS. The request, attributed to the U.S. asset manager, is part of the debate over a possible relocation of the bank outside Switzerland. According to Artisan, stricter capital adequacy requirements make Switzerland no longer an attractive location for the major bank.

In the letter published today and addressed to the Board of Directors, the fund managers describe the proposed requirements as “excessive, punitive, and unnecessary.” Their calculations indicate that UBS would need to increase its CET1 capital from $56 billion to $72 billion. The fund argues that the additional $16 billion could generate returns in a country with less stringent regulations. Artisan also estimates the loss in market value at $36 billion, approximately 23% of UBS’s current market value.

The Bank’s Response and Parliamentary Review

In the document, Artisan calls on the Board of Directors to separate from Switzerland and from a regulatory system that, according to the fund managers, leaves no real choice. UBS has acknowledged receipt of the open letter. A spokesperson, when asked by AWP, reiterated that the goal is to continue operating successfully as a global bank from Switzerland.

The bank added that it will protect shareholders’ interests and provide data and analysis to support an informed decision. UBS supports targeted, proportionate, and internationally coordinated regulation capable of addressing the causes of the Credit Suisse crisis.

On the institutional front, the Federal Council wants 100% coverage for holdings in foreign subsidiaries with hard core capital. Last week, the Council of States opted for 90%; currently, the requirement stands at 45%. The bill now goes to the National Council. UBS also considers the stricter version proposed by the Council of States to be excessive and estimates that this solution would require approximately $16 billion in additional capital.

Operational details

What the Three Thresholds Mean

The comparison lists three numbers, but does not treat them as equal. 45% is the current target; 90% is the figure chosen by the Council of States, the Chamber of the Cantons; 100% is the Federal Council’s target. The bill now moves to the National Council. For those who follow Swiss economic policy, this step prevents treating either of the two proposed thresholds as a foregone conclusion.

| Reference | Threshold | Source | | Current situation | 45% | Currently indicated threshold | | Council of States | 90% | Slightly less stringent option | | Federal Council | 100% | Required coverage for investments in foreign subsidiaries |

Capital Amount and Location

The same caution applies to the $16 billion. Artisan links this figure to the increase in CET1 from 56 to 72 billion and argues that this amount could generate returns in a country with less stringent regulations. UBS, on the other hand, estimates an additional capital requirement of approximately 16 billion under the Council of States’ proposal. The figure matches, but the source attributes it to two different scenarios: it is not presented as an outcome already decided by the legislature.

For those living or working in Switzerland, the key point is therefore to distinguish between a request from an asset manager, a decision by the bank, and an institutional shift. Artisan considers Switzerland no longer an attractive location; UBS states that it intends to continue operating from Switzerland. A potential relocation remains described as a possibility at the center of the debate, not as a foregone conclusion.

The source takes the reader to the corporate and regulatory level. It does not outline a new procedure for clients, but illustrates how the choice of location is linked to capital requirements, the capital of foreign subsidiaries, and the international coordination required by UBS. Those who wish to keep the regulatory issues separate from their banking decisions can consult the conti bancari in Svizzera.

Recommended tools

For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Key points

How to Follow the Story

A useful approach for anyone who wants to understand the developments without reading more into the source than it actually says is to follow a four-step process.

Four Practical Steps

1. Establish the baseline. Note that the figure indicated as the current rate is 45%. This is the starting point for comparison, not a newly approved threshold.

2. Assign each proposal. Next to 100%, indicate the Federal Council; next to 90%, indicate the Council of States. The source notes that the bill now moves to the National Council, so the two percentages should be kept as separate positions.

3. Separate the estimates. Artisan’s 16 billion is linked to the difference between 56 and 72 billion in CET1 capital. UBS’s approximately 16 billion, on the other hand, represents the estimated additional requirement under the Council of States’ solution. Always read the figure in conjunction with the entity providing it to avoid confusing the manager’s assessment with that of the bank.

4. Follow the institutional process. Artisan’s letter, UBS’s response, and the National Council’s review are three distinct elements of the dossier. The source does not report the final outcome of the project, though it already records the bank’s position on remaining in Switzerland.

This sequence is particularly useful for shareholders and clients who wish to evaluate the available information. UBS states that it will protect shareholders’ interests and continue to provide data and analysis to support well-informed decision-making. The potential exit from Switzerland, however, remains a request made by Artisan within an ongoing debate.

For a separate analysis of the daily relationship with the banking system, the comparison using conti bancari in Svizzera is available. For a distinct personal assessment, use calcolatore stipendio/imposte.

Source: swissinfo.ch