ZURICH, June 6 (Reuters) - UBS may be able to

carry out fewer share buy-backs in future following proposals

that it should hold higher levels of core capital, the Swiss

government said on Friday.

Still, UBS restated its capital return plans for this year

after the proposals came out, including share buy-backs, and

said it would communicate its 2026 capital returns ambitions

with fourth quarter and full-year financial results for 2025.

The government proposed higher capital requirements for

the lender's foreign units as part of wide-ranging new rules for

UBS aimed at making Switzerland's financial centre more robust

in the wake of the collapse of Credit Suisse in 2023.

Dividend payments and organic growth should still be

possible, subject to "appropriate transitions periods and

provided profits have been generated," the government said.

"The measure could mean that UBS will temporarily implement

fewer share buybacks and reports a slightly lower return on

equity along with lower risks," the government said.

UBS Chairman Colm Kelleher in April reiterated the Swiss

bank's intention to repurchase shares to the tune of $3 billion

in 2025, despite the looming capital rule changes and global

economic uncertainty.

The growth of foreign subsidiaries or acquisition of foreign

companies by UBS will still be possible, but will become more

expensive because it has to be fully financed by the core

capital, the government added.

"The measure can therefore make foreign growth in

subsidiaries more expensive," it added.

As the regulatory changes are not expected to be effective

before 2027, UBS said it was maintaining its target of

underlying return on CET1 capital of around 15% and an

underlying cost/income ratio of under 70% by the end of 2026.