Banks

UBS to boost dividend, sees buybacks above 2022 target

Key Points
  • UBS Group plans to increase its dividend by 10% to $0.55 per share and expects its 2022 share repurchases to exceed $5 billion, the Swiss bank said on Tuesday.
  • UBS shares were indicated 1.2% higher in pre-market activity after what ZKB analyst Michael Klien called surprise news.

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FABRICE COFFRINI | AFP | Getty Images

UBS Group plans to increase its dividend by 10% to $0.55 per share and expects its 2022 share repurchases to exceed $5 billion, the Swiss bank said on Tuesday.

"UBS will adjust its accrual for the 2022 ordinary dividend from $0.51 to $0.55 per share – an increase of 10% compared to the previous year," it said in a statement, adding its board intended to propose the dividend at the 2023 annual meeting.

"In addition, UBS expects share repurchases to exceed the $5 billion goal for the year 2022. As of 9 September 2022, UBS has bought back $4.1 billion of shares," it said.

The bank said it would provide guidance on next year's capital return with fourth-quarter earnings and expects "to continue to have share repurchases and a progressive dividend".

UBS shares were indicated 1.2% higher in pre-market activity after what ZKB analyst Michael Klien called surprise news.

"We assume that this increase is related to the capital released due to the termination of the Wealthfront acquisition," he wrote in a research note.

UBS and Wealthfront this month said they had agreed to terminate UBS's $1.4 billion acquisition of the automated wealth management provider.

ZKB noted that the higher payout gave UBS a dividend yield of 3.4% at Monday's closing price, slightly below the average of European peers but slightly above consensus of $0.53 per share.