The number one Swiss bank UBS is launching a new share buyback program, up to a total of 6 billion dollars over two years. The program opens as the three-key bank has just completed the previous one, she said on Wednesday.
As part of the share buyback program launched on February 8, 2021, 240,335,273 shares were bought back via a dedicated trading line on SIX, which represents 6.49% of the current share capital, recalls the bank. In francs, this corresponds to a volume of 3.8 billion, including 1.5 billion since the start of 2022.
UBS continues with a new program starting March 31, covering a total of $6 billion over two years, i.e. until March 29, 2024. By the end of the year, the volumes bought back through these two programs are expected to reach $5 billion.
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As of March 28, 2022, UBS held directly and indirectly, in own position, 351,216,324 registered shares. This corresponds to 9.49% of the voting rights and the share capital entered in the commercial register.
Credit Suisse announced last December that it had completed its 2021 share buyback program, which involved more than 25 million shares for a total amount of 305 million francs, at an average purchase price of 12.165 francs.
Cash amassed during the pandemic
Many share buyback programs are launched by European banks. The Italian group UniCredit plans to return at least 16 billion euros to its shareholders by 2024, while its competitor Intesa Sanpaolo is aiming for 22 billion euros by 2025. After completing a buyout program at 900 million euros in December 2021, BNP Paribas wants to increase the proportion of its profits that are returned to its shareholders until 2025. The French bank could distribute 4.5 billion euros for 2021 if its proposal is accepted during the general meeting of May 17.
This generosity is explained by the lifting of restrictions, which had limited the payment of dividends and share buybacks during the pandemic, in the European Union as in Switzerland. Many institutions had suspended these distributions during the pandemic, so as to strengthen their balance sheets, before increasing their reserves by borrowing at historically low interest rates. This cash is now used to support their share price.
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In the United States, companies listed in the S&P500 index repurchased shares for at least 265 billion dollars during the fourth quarter, all sectors combined, according to Bloomberg. This figure erases the record reached the previous quarter, at nearly 235 billion dollars.