Swiss Banking Giant UBS Launches New Share Buyback Program of up to $2 Billion

By Trisha Andrada

Apr 02, 2024 05:35 AM EDT

Swiss banking giant UBS revealed a new share buyback program of up to $2 billion on Tuesday. Of that amount, $1 billion is expected to be repurchased this year.

"Our ambition is for share repurchases to exceed our pre-acquisition level by 2026," the bank said in a statement.

The logo of a UBS bank in Geneva is seen 01 Octobrer 2007.
(Photo : FABRICE COFFRINI / AFP via Getty Images)

Swiss Banking Giant UBS Initiates New Share Repurchase Program

As previously announced, UBS plans to repurchase up to $1 billion of its shares this year, starting after the completion of the merger of UBS and Credit Suisse, which is expected to happen by the end of the second quarter.

The new program was launched following the completion of the 2022 buyback, during which 298.5 million of its shares were purchased. According to UBS, this represented 8.62% of its stock, which is worth $5.2 billion.

CNBC reported that the bank's 2022 share repurchase program ended last month. During buybacks, companies buy their own shares on the stock exchange, reducing the number of shares held by investors.

These events usually coincide with a company's stock increasing as shares become scarcer. Buybacks also provide a way for firms to return cash to shareholders, along with dividends.

Read Also: Swiss Banking Giant UBS Intends to Broaden Business Footprint in the US

UBS and Credit Suisse Integration

Following Sergio Ermotti's announcement of his return for a second term as UBS CEO in late March 2023, the bank has undertaken the enormous task of merging Credit Suisse's business.

According to the figures released last week, after his surprising comeback, Ermotti earned 14.4 million Swiss francs ($15.9 million) in 2023. 

Though it posted a second straight quarterly loss in February due to integration expenditures, the bank's underlying operational earnings were solid. So far this year, shares are up over 6%.

Read More: UBS Starts Slashing Asia Private Banking Positions as Earnings Fall: Report

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