UBS Group (UBS) Announces a New Share Repurchase Program

UBS Group AG UBS has announced a new share repurchase program. Under the plan, starting from Apr 3, the company is authorized to buy back up to $2 billion worth of common stock. The program will expire on Apr 2, 2026.
This year, UBS is expected to buy back up to $1 billion worth of shares under the new plan. This will start following the completion of the merger between UBS AG and Credit Suisse AG, which is expected to take place in the second quarter of 2024. The merger deal was announced on Mar 19, 2023, with a deal value of $3.2 billion.

The company aims to exceed its pre-acquisition level of share repurchases by 2026. This strategic step shows UBS Group's commitment to enhancing shareholder value over the long term.

Prior to this, on Mar 30, 2022, the company launched a two-year share repurchase program worth up to $6 billion, which concluded on Mar 28, 2024. Under this plan, the company repurchased 298.5 million shares for $5.2 billion through a separate trading line on the SIX Swiss Exchange. This represented 8.62% of the current registered share capital of the bank.

The company utilized almost 178 million shares from the 2022 share repurchase program for the acquisition of the Credit Suisse Group.

Apart from the share repurchase program, the company also pays out dividends to its shareholders. The bank intends to propose an annual dividend of 70 cents per share for 2023. Preceding this, UBS announced a yearly cash dividend of 55 cents per share, on Apr 5, 2023. UBS has increased its dividend five times in the past five years and has a payout ratio of 10%.

The company is committed to returning capital to its investors. However, its fluctuating quarterly performance and unfavorable debt/equity ratio suggest such capital distribution activities may prove to be challenging.

Over the past six months, shares of UBS have jumped 27.3% on the NYSE compared with the 17.4% growth of the industry.

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Currently, UBS Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Share Buyback Plans of Other Finance Firms

In March, TrustCo Bank Corp NY TRST announced a stock buyback plan. The company’s board of directors approved a program, under which, TRST may repurchase up to 0.2 million shares or 1% of its outstanding current stock.

The company’s last buyback plan expired on Mar 17, 2024. On Mar 17, 2023, TRST’s board of directors approved a share repurchase program of up to 0.2 million shares.

Last Month, FB Financial Corp. FBK announced a share repurchase program. Per the plan, the company is authorized to buy back up to $100 million worth of shares. The plan is set to expire on Jan 31, 2026.

This new repurchase plan replaced the company’s prior authorization, which expired on Jan 31, 2024. During 2023, the company bought back 136,262 shares of its common stock. As of Dec 31, 2023, approximately $61 million worth of shares were remaining under the old repurchase plan.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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