The Swiss bank said Tuesday that UBS Group AG plans to raise its dividend by 10%, to $0.55 per share, and that it expects its share buybacks in 2022 to be more than $5 billion.
“UBS will change its accrual for the ordinary dividend in 2022 from $0.51 to $0.55 per share, which is a 10% increase from the year before,” it said in a statement, adding that its board planned to propose the dividend at the annual meeting in 2023.
“UBS also expects to buy back more shares than the $5 billion goal for 2022. As of September 9, 2022, UBS has bought back $4.1 billion worth of shares,” the report said.
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The bank said that it would give information about next year’s capital return when it reported its fourth-quarter earnings. It also said that it expected to “continue to buy back shares and pay a growing dividend.”
After what ZKB analyst Michael Klien called “surprise news,” UBS shares were said to be 1.2% higher before the market opened.
“We think this increase is because of the money that was freed up when the Wealthfront acquisition fell through,” he wrote in a research note.
This month, UBS and Wealthfront said they had reached an agreement to end the deal for UBS to buy Wealthfront for $1.4 billion.
ZKB said that the higher payout gave UBS a dividend yield of 3.4% at Monday’s closing price, which was slightly below the average of European peers but slightly above the consensus of $0.53 per share.