The major bank wants to spend up to $2 billion on a new share buyback program. This could have a welcome effect on UBS shares.
On Tuesday, UBS confirmed its intention to launch a new share buyback program this year. The major bank announced that it wishes to buy back up to $2 billion of its own shares as part of the program.
The largest Swiss bank will start with an initial tranche of buybacks in the second quarter, once the merger of both «parent» banks UBS AG and Credit Suisse (CS) AG is completed. The first tranche is intended to cover buybacks with a current value of $1 billion.
Shares Used for CS Acquisition
The aim is to buy back enough shares to bring the bank above the level it had before the merger, and to do this by 2026. Today, on April 2, UBS ended a program from 2022 in which more than $5 billion of its own shares were purchased.
Some of the shares were used for the forced takeover of CS.
At Lofty Heights
The major bank is under a great deal of pressure to make good on the expectations from the CS takeover on the stock market. Since the transaction in March 2023, the value of the UBS shares has risen by more than 60 percent but has now reached fragile heights, as a recent trading halt revealed.
Share buybacks which concentrate the profit for existing shareholders tend to have a stabilizing effect on prices.
