Swiss banking giant UBS has made a significant announcement. On April 2, 2024, UBS declared a new share repurchase program. The program is set to be worth up to $2 billion.
The new program is expected to commence after the completion of the merger of UBS AG and Credit Suisse AG. This merger is anticipated to occur by the end of the second quarter. In 2024, UBS plans to repurchase up to $1 billion of its shares.
Share buybacks occur when firms purchase their own shares on the stock exchange. This reduces the portion of shares in the hands of investors. They offer a way for companies to return cash to shareholders. This usually coincides with a company’s stock moving higher, as shares get scarcer.
UBS has undertaken the mammoth task of integrating Credit Suisse’s business. This followed the announcement in late March 2023 that former chief Sergio Ermotti would return for a second spell as CEO. Figures last week showed that Ermotti earned 14.4 million Swiss francs ($15.9 million) in 2023, following his surprise return.
Despite reporting a second consecutive quarterly loss due to integration costs, UBS continues to deliver strong underlying operating profits. The bank’s 2022 share repurchase program concluded last month. During this program, 298.5 million of its shares were purchased. This represented 8.62% of its stock worth $5.2 billion.
UBS’s ambition is for share repurchases to exceed its pre-acquisition level by 2026. With shares up more than 6% so far this year, the future looks promising for UBS
