UBS has completed a share buyback and is starting a new one. However, the figures on the purchase of treasury shares reveal surprising transactions.
The big bank UBS wanted to make a coup today, Tuesday.
The financial institution, which made billions of dollar as profit with the Credit Suisse (CS) emergency merger, intends to buy back its own shares worth a maximum of 2 billion dollars, according to a communiqué.
Stock market hardly rejoices
This program will begin on 3 April 2024 and end on 2 April 2026 at the latest – or earlier if the maximum amount is reached – it added. Based on the closing price of UBS registered shares on the SIX Swiss Exchange last Thursday, this amounts to around 64.1 million shares.
The buyback will be carried out via a separate trading line on the SIX. The shares are being repurchased for the purpose of a capital reduction.
Such announcements usually trigger a price firework on the stock exchange. At the major bank UBS, however, the joy was subdued. Today, Tuesday, the share price even closed slightly down.
Involved in finding a solution
Individual transactions are always conspicuous in such share buybacks. For example, muula.ch has already made public suspicions of insider trading at life insurer Swiss Life.
At UBS, on the other hand, what is striking is that while its competitor CS was fighting for survival in March 2023, it bought back its own shares on an unprecedented scale.
This seems strange because the big bank was involved in finding a solution for CS, which gives it such a negative connotation.
Was UBS possibly speculating on price gains with its own securities or helping to boost demand? The impression is at least somewhat palpable.
Demand for own securities
The figures show in detail that UBS usually bought back less than one million of its own shares on normal trading days. In exceptional cases, the big bank sometimes bought back 1.6 million shares.
But when things got really bad for CS, UBS suddenly bought back 4 million of its own shares per day. This unprecedented buying spree had never happened before.
Even on the day when crisis-ridden bank CS announced aid for liquidity, March 15, 2023, UBS happily continued to gorge on itself. Moreover – twice as much as usual.
UBS created its own demand for its own shares on March 20 and 21, 2023. The historic media conference on the demise of CS, which muula.ch also broadcast live, was held on March 19, 2023.
However, that overview also shows a slide in the UBS share price.
End not published promptly
Between 22.03.2023 and 28.03.2024, UBS suddenly stopped buying back any of its own shares. In this respect, the statement that the share buyback program only ended on 28.03.2024 even seems misleading.
The original purchase volume of 5 billion dollars had long since been reached anyway. So there was peace and quiet for over a year without officially announcing the end of the buyback program.
This long period of silence surrounding the termination of a buyback program was already noticeable in the case of the Adecco share buyback organized by UBS, as reported by muula.ch.
Maximum values exceeded?
“The maximum buyback volume per day in accordance with Art. 123 para. 1 lit. c of the Financial Market Infrastructure Ordinance (FMIO) is 2,078,608 shares”, the UBS media release now even states.
‘Apparently’ the big bank UBS was even able to buy back 4 million of its own shares per day following the emergency merger with CS.
02.04.2024/kut./ena.