Citi Retains a Neutral Rating on UBS Group (UBS) Amid Capital Considerations

UBS Group AG (NYSE:UBS) is one of the best Goldman Sachs bank stocks. On June 9, UBS maintained a Neutral rating on UBS, with a price target of CHF26.90. Analysts talked about the Swiss Federal Council’s newly announced proposals, introduced following the Credit Suisse fallout and a comprehensive review of Switzerland’s ‘too big to fail’ regulatory framework.

The proposals introduce an incremental CET1 capital requirement of $26 billion, landing at the upper end of market expectations. However, the outlined transition period of six to eight years post-implementation provides UBS with a meaningful runway to meet the requirement properly.

Citi analysts noted that the extended transition timeline alleviates near-term uncertainty. In their view, UBS is well-positioned to address the incremental capital requirements without disrupting its capital return strategy, including dividends and share buybacks.

A close-up picture of financial documents and computers in a modern office setting.

However, analysts cautioned that the proposals remain subject to consultation and legislative review, introducing potential for revisions. They also highlighted concerns around UBS’s relative earnings momentum, which continues to trail peers due to sustained weakness in net interest income.

UBS Group AG (NYSE:UBS) is a global financial services firm offering a wide range of solutions for individuals, businesses, and institutions, including wealth management, personal and corporate banking, asset management, and investment banking.

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