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UBS pledges US$2 billion of share buybacks over next two years

Bloomberg • 2 min read
UBS pledges US$2 billion of share buybacks over next two years
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UBS Group AG said it would buy back up to US$2 billion of its shares over the next two years, giving shareholders greater visibility on returns as the lender targets completion of its takeover of Credit Suisse. 

The new program will begin Wednesday and end at the latest on April 2, 2026. “Our ambition is for share repurchases to exceed our pre-acquisition level by 2026,” the Zurich-based bank said in a statement Tuesday. 

UBS Shares Have Risen Since Credit Suisse Deal

The bank confirmed previously announced plans to repurchase US$1 billion of shares this year as part of the new program. Its shares were little changed in early morning trading in Zurich.

UBS also said its 2022 share repurchase program concluded on March 28. It halted that US$5 billion share buyback program in April last year amid the government-backed takeover of its former rival. 

See also: China Yuchai approves US$40 mil share buyback plan

The lender announced a restart of buybacks in February, signalling confidence over its integration with Credit Suisse. At the same time, the bank has posted two quarterly losses in a row as it grappled with the integration task.  

Since closing the takeover of Credit Suisse in June, UBS has outlined major targets for the integration of its former rival including around US$13 billion in cost savings, a boost from about US$10 billion previously announced. The bank also confirmed its profitability targets through 2026. 

Both Chief Executive Officer Sergio Ermotti, who returned to lead UBS last year, and Chairman Colm Kelleher have warned that 2024 will be a more difficult year in terms of keeping costs down. The bank said it expects to complete the merger by the end of the second quarter.

See also: CDL steps up share buybacks, spends nearly $13 million over three trading days

Last month, the Swiss lender announced that it cut its bonus pool for 2023 by 14% despite record annual profit driven by the acquisition of Credit Suisse. The bonus allocation was a reflection of the impact from challenging operating conditions and market volatility, the bank said.  

Ermotti received a total compensation of around US$16 million, making him the best-paid European bank CEO.

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