Switzerland to Soften Capital Ordinance in UBS Win, BofA Says

New bank capital rules to be presented by the Swiss government next month will likely be less severe on UBS Group AG than the current proposals, according to Bank of America analysts.

The ordinance on intangible capital could end up allowing so-called “temporary differences” deferred tax assets to be counted toward CET1 capital up to a cap at 10% of the total, which would be “consistent” with the treatment under international rules known as Basel III, Antonio Reale and Rohan Datta said in a note published Wednesday. This would lower the measure’s capital charge for UBS to $6.2 billion from the current estimate of $10.8 billion, they said, calling it a “potential step in the right direction.”