UBS is apparently reviewing scenarios for a possible relocation of its headquarters abroad. The backdrop is planned stricter capital requirements for systemically important banks in Switzerland. As the "Wall Street Journal" reported on Thursday, citing sources, the major bank and its advisers have drawn up corresponding contingency plans. UBS is also said to have received inquiries from potential US business partners about possible transactions.

According to the report, the options under discussion include the purchase of a US financial institution followed by a relocation, a merger with a European competitor, or an acquisition by a US company. No concrete negotiations are said to be underway so far. Formal steps for a transaction have also not been initiated.

The trigger is the planned tightening of capital requirements for large banks, which will affect UBS alone. The Swiss authorities want to ensure that the state does not have to step in again with extensive support measures in the event of another banking crisis. The measures are linked to the rescue of Credit Suisse by UBS in 2023.

Costs of $16 Billion

UBS estimates that the proposed rules could result in additional capital requirements costing around $16 billion. Under the current proposal, the bank would have seven years to implement the new requirements gradually. The bill will next be debated in the National Council.

According to earlier statements, Finance Minister Karin Keller-Sutter considers a relocation unlikely. She argues that such a move would be more expensive for UBS than remaining in Switzerland.

A possible relocation would have significant economic and symbolic importance. UBS's assets amount to around $1.7 trillion, equivalent to roughly 150 percent of Swiss economic output. The bank is one of the country's most important financial institutions and a key part of the Swiss financial center.

Keep Swiss Domestic Business

Even if the headquarters were relocated, UBS could retain its Swiss domestic business or organize it separately. According to the bank, it extends around $417 billion in loans to Swiss companies and households and generates about one-third of its revenue domestically.

According to the "Wall Street Journal," some major shareholders, including Cevian Capital and Artisan Partners, are meanwhile in favor of reviewing possible alternatives outside Switzerland. UBS Chairman of the Board Colm Kelleher is also said to be increasingly open to exploring such options.

No final decision has been made so far. UBS could still decide to remain in Switzerland, the report says. However, the dispute over capital regulations is likely to continue shaping the strategic direction of the major bank and the future of the Swiss financial center.