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UBS Raises Dividend 25% And Restarts Share Buybacks

Swiss banking giant UBS (UBS) has announced that it plans to raise its annual dividend payment to shareholders by 25% after posting better-than-expected fourth-quarter earnings.

Going forward, UBS said it will pay its stockholders an annual dividend of $0.70 U.S. per share, up from $0.56 U.S. currently.

The new dividend payment equates to $0.175 U.S. per share each quarter and lifts the dividend yield on UBS stock above 2%.

The dividend increase was announced along with plans for UBS to restart its share buybacks in the second half of this year. UBS said it plans to buyback $1 billion U.S. of its own stock by the end of 2024.

The dividend increase and resumption of share buybacks were announced as UBS reported a Q4 2023 net loss of $279 million U.S.

The loss was blamed on ongoing efforts to integrate former rival Credit Suisse bank, which UBS took over last year.

However, the latest net loss was better than the net loss of $372 million U.S. that analysts had expected from the Swiss lender.

In the previous third quarter of 2023, UBS reported a net loss of $785 million U.S., which resulted from $2 billion U.S. of expenses related to the Credit Suisse takeover.

UBS said that its operating profit before tax in Q4 2023 came in at $592 million U.S., which was below expectations for $762 million U.S.

As part of its absorption of Credit Suisse, UBS has been forced to cut more than 3,000 jobs, incurring costs for severance packages and buyouts.

UBS reported total revenue of $10.86 billion U.S. in the Q4 2023, down from $11.70 billion U.S. in Q3 of last year.

The stock of UBS has gained 39% in the last 12 months and currently trades at $29.79 U.S. per share.