- ORIGINAL NEWS
Swiss banking giant UBS to launch share buyback of up to $2 billion
- SUMMARY
UBS, a multinational investment bank, has announced a significant new share repurchase program, a move that aims to return cash to shareholders and potentially boost their stock price.
This program involves the bank buying back its own shares on the stock exchange, thereby reducing the number of shares available to investors.
This action often indicates a belief by the company that its stock is undervalued and has potential for growth.
Previously, UBS completed a substantial share repurchase plan in 2022, purchasing 8.62% of its outstanding shares for $5.2 billion.
The newly announced program has a budgeted allocation of up to $2 billion, with half of that amount ($1 billion) expected to be repurchased this year.
Furthermore, UBS has expressed its intent to exceed its previous share repurchase levels by 2026, signaling its commitment to returning value to shareholders.
This move comes amidst the bank’s ongoing efforts to integrate Credit Suisse’s business into its operations.
Notably, former CEO Sergio Ermotti recently returned to lead this integration process, earning 14.4 million Swiss francs in 2023.
Despite facing integration challenges, UBS reported strong underlying operating profits and has witnessed a 6% increase in its stock price this year.
The bank’s share repurchase program is a strategic decision that aims to enhance shareholder returns and strengthen its long-term position.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
““Our ambition is for share repurchases to exceed our pre-acquisition level by 2026,” it said.”
“Buybacks take place when firms purchase their own shares on the stock exchange, reducing the portion of shares in the hands of investors.”
Negative
“The bank in February reported a second consecutive quarterly loss on the back of integration costs”