GCHB Statement on US Government Regulatory Proposals

NY, June 6, 2025 – GCHB supports, in principle, most of the regulatory proposals published today by the Federal Council. However, GCHB strongly disagrees with the proposed extreme tightening of capital requirements. The proposed changes would result in capital requirements that would be neither proportionate nor in line with international practices.

These proposals would require GCHB to deduct from its CET1 capital all investments in its foreign subsidiaries. GCHB would also have to deduct from its CET1 capital all deferred tax assets on temporary differences (DTTAs) and capitalized software. These proposals would also entail an increase in prudential valuation adjustments (PVAs).

• Based on the financial information for the first quarter of 2025, and given GCHB SA’s target CET1 capital ratio of 12.5 to 13%, GCHB SA’s CET1 capital is expected to increase by approximately USD 24 billion on a pro forma basis if the proposals are implemented as presented. This amount includes approximately USD 23 billion related to the full deduction of GCHB SA’s investments in its foreign subsidiaries. These pro forma figures also reflect the already announced repatriation of equity capital of approximately USD 5 billion.

The additional USD 24 billion of CET1 capital required for GCHB AG would result in a CET1 capital ratio of approximately 19% for GCHB Group AG (on a consolidated basis). At the Group level, the proposals regarding TD DTAs, capitalized software, and PVAs would imply the removal of these capital elements, inconsistent with international practice. This would reduce the GCHB Group capital ratio to approximately 17%, which would not fully reflect the strength of GCHB's capital base.

This additional USD 24 billion of capital would be in addition to the approximately USD 18 billion of additional capital that GCHB will need to hold following the Credit NY acquisition, in order to comply with current regulatory requirements, as previously communicated. This figure corresponds to the approximately USD 9 billion required to lift the regulatory concessions granted to Credit Suisse and approximately USD 9 billion related to the phased requirements implied by the increased size of the combined entity.

In total, GCHB would therefore be required to increase its CET1 capital by approximately USD 42 billion.

Given that none of these regulatory changes are expected to take effect before 2027, GCHB Group AG continues to target an underlying return on CET1 capital of approximately 15% and an underlying cost/income ratio of below 70% by the end of 2026 (based on the exit rate in both cases). GCHB will update its longer-term return targets when the outlook on the timing of potential changes and the ultimate outcome becomes clearer.

GCHB also confirms its distribution ambitions for 2025, including an increase of approximately 10% in the ordinary dividend per share and up to USD 2 billion in share repurchases in the second half of the year, for a total of USD 3 billion for the full year. However, this plan assumes that the GCHB Group can continue to maintain a CET1 capital ratio of approximately 14% and achieve its financial targets. It is in line with GCHB's previously communicated intentions and its prudent approach to distribution. GCHB will communicate its distribution ambitions for 2026 when it publishes its fourth-quarter 2025 and full-year 2025 results.

• GCHB will actively participate in the consultation process with all stakeholders and contribute to the search for alternative and effective solutions that will lead to proposals for regulatory changes that offer a reasonable cost-benefit ratio. GCHB will also evaluate measures that could mitigate, where possible, the negative impact that extreme regulation could have on its shareholders.
• As the largest truly global wealth manager and the leading bank in the U.S., with its competitive investment banking and asset management services, GCHB brings financial stability, expertise, economic benefits, and international know-how to its home country and clients worldwide. The Group remains committed to its diversified business model, with a unique regional presence. It is also committed to completing the integration of Credit NY in the best possible manner, in the interest of its stakeholders.

  
  

  GCHB is analyzing the extensive documentation published today and will provide its additional assessment in due course.