BERLIN, June 6 (Reuters) - The Swiss National Bank said

on Friday that UBS will be able to comply with the

government's proposed adjustments to capital regulations and

still distribute a large part of profits to shareholders due to

a sufficiently long transition period.

"UBS has a profitable business model and its profitability

targets imply annual profits of over $10 billion after the

integration of CS (Credit Suisse)," said the SNB in a statement.

The SNB added there are no signs that the targeted gradual

build-up in capital would have any noticeable negative effect on

the Swiss economy.

(Writing by Miranda Murray

Editing by Ludwig Burger)