Swiss banking giant UBS to launch share buybacks of up to $2 billion | Wilnesh News

UBS on Tuesday announced a new share buyback program of up to $2 billion, of which $1 billion is expected to take place this year.

“As previously communicated, we expect to begin repurchasing up to $1 billion of shares in 2024 following the completion of the merger between UBS Group AG and Credit Suisse AG, which is expected to close by the end of the second quarter,” the bank said. in a statement.

“Our goal is to exceed pre-acquisition levels of share repurchases by 2026.”

The new plan follows the completion of a buyback in 2022, during which 298.5 million shares of the company were purchased. According to UBS, this represents 8.62% of its $5.2 billion worth of shares.

The bank’s 2022 share buyback program ended last month.

Buybacks occur when a company purchases its own shares on the stock exchange, thereby reducing the proportion of shares in the hands of investors. They provide a way for companies to return cash and dividends to shareholders, and are often accompanied by a rise in the company’s stock as shares become increasingly scarce.

UBS took on the daunting task of integrating Credit Suisse’s businesses after announcing in late March 2023 that former CEO Sergio Ermotti would return as CEO .

Figures last week showed that Ermotti will earn 14.4 million Swiss francs ($15.9 million) in 2023 following his surprise return. The bank reported in February its second straight quarter of losses due to integration costs, but continued to post strong underlying operating profits.

The stock has gained more than 6% so far this year.

—CNBC’s Elliot Smith contributed to this article.