Prospects for UBS and C Suisse payouts diminish

Graph And Coins

Oswald Gruebel speaks.

Prospects for fatter dividend payouts from Switzerland’s biggest banks are receding as Swiss authorities ratchet up capital demands.

Bloomberg reports that UBS was told to hold more capital for legal risks this quarter, while the finance minister said last month leverage rules might be tightened. Credit Suisse is in talks with the regulator that may also lead to a demand for more capital, though it would be much smaller in scope than for UBS, a person with knowledge of the matter who asked not to be identified said this month.

The tighter requirements, on top of stricter rules implemented over the past five years, arrived as the banks were preparing to start paying higher dividends. UBS CEO Sergio Ermotti, 53, pledged to pay out more than half of profits to shareholders once the company reaches a common equity ratio of 13% - a level that probably would have been achieved this year without the fresh demands.

'The message from regulators is very clear: ‘If you think you can pay dividends, forget it,’ Oswald Gruebel, who served as CEO of both UBS and Credit Suisse, said by phone. 'They don’t want to let banks pay any dividend. It’s totally open how long this will last'.

To access the complete Bloomberg article hit the link below:

UBS, Credit Suisse Payout Hopes Ebb as Regulators Tighten Leash:

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images: © Martin Abegglen, © teegardin

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