UBS Aims for 15% Return on Equity by 2026, Announces $2 Billion Share Repurchase
Learn about UBS's ambitious goals for the future, including their plans for integrating Credit Suisse and repurchasing shares.
UBS, the world's largest international wealth manager, is setting its sights on a return on equity of up to 15% by the end of 2026. The bank has been actively working on integrating Credit Suisse in what is considered one of the biggest bank M&A deals since the 2008 financial crash. In a recent announcement, UBS revealed its plans to commence repurchasing up to $2 billion in shares starting from 3 April.
The Zurich-listed bank had previously stated its intention to repurchase up to $1 billion of its stocks once the acquisition of Credit Suisse is finalized, which is expected to be completed by the end of the second quarter. UBS expressed its ambition for share repurchases to surpass pre-acquisition levels by 2026, with the goal of enhancing its return on equity.
UBS aims to improve its return on equity through these buybacks, as it reported a fourth-quarter return on equity of 4.7 per cent on an underlying basis. The bank plans to maintain a reported return on CET1 capital of approximately 15 per cent by the end of 2026, with a further increase to around 18% by 2028. Despite facing a pre-tax loss of $751 million in Q4 2023, including credit loss costs of $136 million, UBS remains focused on its strategic goals.
In a move to support its share repurchase program, UBS repurchased over 298.5 million shares through a separate trading line on the SIX Swiss Exchange as part of the 2022 share repurchase initiative launched on 31 March 2022. This block of shares represented 8.62% of the total.
UBS's strategic focus on enhancing its return on equity through share repurchases and maintaining a strong capital position underscores its commitment to long-term growth and value creation for shareholders.
UBS Aims for 15% Return on Equity by 2026, Announces $2 Billion Share Repurchase
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