Krakow, Poland – UBS, the Swiss multinational investment bank, has recently unveiled a new share repurchase program totaling up to $2 billion. Of this amount, approximately $1 billion is expected to be utilized within the current year. The announcement came on Tuesday, with the bank stating that the share repurchases are scheduled to begin following the completion of the merger between UBS AG and Credit Suisse AG, slated for the end of the second quarter.
According to the bank’s statement, they aim for the repurchases to surpass the pre-acquisition levels by 2026. This new program comes on the heels of the successful 2022 buyback, which saw 298.5 million shares repurchased, equivalent to 8.62% of its stock and valued at $5.2 billion. The 2022 share repurchase program was finalized last month.
Share repurchases, commonly known as buybacks, see companies buying back their own shares from the stock market, thus reducing the portion held by investors. This tactic allows companies to return cash to shareholders, usually leading to an increase in stock value as shares become scarcer.
In recent developments, UBS has been focused on integrating Credit Suisse’s business operations. Following the return of former CEO Sergio Ermotti for a second term in March 2023, the bank is navigating the challenges associated with this strategic move. Figures released last week revealed that Ermotti earned 14.4 million Swiss francs ($15.9 million) in 2023, following his unexpected return. The bank faced a second consecutive quarterly loss in February attributed to integration costs, although it continued to deliver solid underlying operating profits.
Despite the challenges, UBS shares have seen a rise of over 6% since the beginning of the year, showcasing resilience amidst the changing landscape of the financial sector. The bank’s commitment to strategic investments and financial stability will play a crucial role in its future growth and success.