UBS Group AG (UBS.US) CEO Sergio Ermotti has strongly dismissed speculation that the bank intends to leave Switzerland, stating that management is seeking a compromise on controversial capital requirements. Speaking at JPMorgan's European Financial Conference on Thursday, Ermotti said, "UBS as a Swiss bank is the best possible outcome, and that’s what my Chairman Colm Kelleher and I are working toward—the rest is nonsense. There has never been a threat of leaving Switzerland. It’s simply absurd."

The bank’s management is attempting to persuade the Swiss government to ease upcoming regulatory reforms, which could require UBS to set aside an additional $26 billion in capital. Earlier reports suggested the bank had considered relocating its headquarters earlier this year. Since the beginning of the year, UBS has been evaluating various options regarding Swiss capital requirements and reportedly held discussions with U.S. Treasury Secretary Janet Yellen about a potential headquarters move.

However, Ermotti emphasized that the government’s current capital proposal—scheduled for parliamentary review next year—is unacceptable. He declined to specify potential mitigation measures before the full legal details are finalized, stating that the bank is still assessing all available options.

UBS recently gained some parliamentary support after an influential committee criticized parts of the government’s plan. The reforms would require UBS to fully fund all overseas subsidiaries, including its U.S. wealth management and investment banking divisions, using parent company capital.

In a worst-case scenario, theoretical options include extreme measures—such as merging with or acquiring a non-Swiss bank to change its legal domicile and bypass the new rules—or more conventional steps, such as technical adjustments to accumulate sufficient capital over several years. Reports in September indicated that UBS’s leadership is generally disinclined toward drastic actions. A vote on the capital reforms is not expected until 2027 at the earliest.