New capital requirements for Swiss banks will slow UBS’s growth, the finance minister has said.

ZURICH (Reuters) – Tighter capital requirements for the banking industry proposed by the Swiss government will impact UBS’s ability to grow, Switzerland’s finance minister said in an interview published on Saturday.

Karin Keller-Sutter told Aargauer Zeitung that Switzerland’s largest bank will have to hold more capital if the regulatory package announced on Wednesday to prevent a repeat of Credit Suisse’s collapse is implemented.

“In short, the cost of growth will be greater,” she said.

The proposed changes target the country’s four largest banks, with 22 measures and more than 200 pages of recommendations on how to monitor banks deemed “too big to fail” (TBTF).

The government aims to quickly implement this measure and present two packages for implementation in the first half of 2025.

Among these measures, Keller-Sutter highlighted a proposal to change how UBS’s Swiss parent and the country’s other systematic banks will be required to support future foreign holdings of up to 100%, up from the current 60%.

“Adjusting these regulations now will impact the growth and scale of UBS,” she said.

These requirements will also make it easier to deal with foreign authorities in the event of a crisis, she added.

Analysts estimate that UBS may need to hold $10 billion to $15 billion in excess capital than it currently has.

In the interview, Keller-Sutter again criticized UBS CEO Sergio Ermotti’s pay package, which amounted to 14.4 million Swiss francs ($15.75 million) last year.

“UBS is doing itself a disservice in this way,” she said.

($1 = 0.9140 Swiss Franc)