Major bank UBS surprisingly announced details of its capital management on Tuesday. And shareholders and management can rejoice.
UBS published a surprising media release. The Board of Directors of the money house will propose a dividend of 0.55 dollars per share to their Annual General Meeting 2023, the money house announced on Tuesday.
This is 10 percent more than the previous year. Previously, 0.51 dollars per share had been planned. The funds for this have already been set aside, it further reported.
No money for growth
At the same time, the major bank announced that its share buyback program would be much more extensive than previously planned. It will buy back more than the targeted 5 billion dollars in own shares in 2022. As of Sept. 9, the volume of the share buyback already stands at $4.1 billion, the bank elaborated.
Thus, instead of investing in growth initiatives the money will be spent on buying own securities. The bank plans to communicate more details about all this when it announces its fourth-quarter results.
The bank’s shareholders and management should be happy about the news. The owners get more money and in such transactions usually stock options, which the management receives as bonuses, would also increase.
After the information became known, the UBS share price increased by 1.2 percent. Already on Monday, UBS papers had surprisingly gained about 2.2.
UBS had recently called off a $1.4 billion acquisition, as was also reported by muula.ch. Thus, the money house had those funds freed up.
And last weekend, former UBS Group CEO Sergio Ermotti spoke out about the Swiss banking market. In an interview with the “NZZ am Sonntag” he had said that there was ‘no need’ for two big banks in this country.
With the announcement of the dividend increase and the share buyback, it looks to outsiders as if UBS is leaving no doubt as to which big bank will survive in Switzerland.