Swiss banking giant UBS unveiled plans for a new share repurchase program worth up to $2 billion, with a significant portion expected to occur this year, the company announced on Tuesday.
The bank disclosed that it aims to repurchase up to $1 billion of its shares in 2024, with the buyback initiative set to commence following the anticipated completion of the merger between UBS AG and Credit Suisse AG by the end of the second quarter.
“Our ambition is for share repurchases to exceed our pre-acquisition level by 2026,” UBS stated in a press release.
This new program comes on the heels of the completion of UBS’s 2022 share repurchase initiative, during which the company purchased 298.5 million of its shares, amounting to 8.62% of its stock valued at $5.2 billion.
Share buybacks are a common practice among corporations, allowing them to acquire their own shares from the stock market, thereby reducing the number of shares available to investors. Such actions often coincide with an increase in the company’s stock price, as the reduced supply of shares can lead to higher demand.
UBS has been undergoing a significant integration process following its decision to merge with Credit Suisse, a task taken on by former CEO Sergio Ermotti, who returned for a second tenure in March 2023. Despite the integration costs, UBS reported strong underlying operating profits, albeit with a second consecutive quarterly loss in February.
The announcement of the share buyback program underscores UBS’s commitment to enhancing shareholder value amidst its ongoing strategic initiatives and business integration efforts.
