UBS is going to revise its accrual for the ordinary dividend that will be paid in 2022 from USD 0.51 to USD 0.55 per share, which is an increase of 10% compared to the amount paid out the year before.
According to the statement released by the Swiss bank on Tuesday, the Board of Directors has the intention of submitting the dividend for approval by shareholders at the Annual General Meeting that will be held in 2023.
In addition, UBS anticipates that the amount of money spent on repurchasing shares would be greater than the aim of USD 5 billion for the year 2022. UBS has repurchased USD 4.1 billion worth of shares as of the 9th of September 2022.
The bank has stated that it plans “to continue to have share repurchases and a progressive dividend” and that it would offer guidance on next year’s capital return together with its results for the fourth quarter.
Following what ZKB analyst Michael Klien referred to as “unexpected news,” UBS shares were suggested to be trading 1.2% higher before the market opened.
In a research note, he stated, “We infer that this rise is connected to the funds released owing to the cancellation of the Wealthfront transaction.”
This month, UBS and Wealthfront announced that they had reached an agreement to terminate UBS’s planned acquisition of the automated wealth management service for $1.4 billion.
UBS and Wealthfront have reached a consensus to terminate their merger agreement, which was first announced on 26 January 2022 and provided that UBS Americas Inc. would acquire Wealthfront. The termination of this agreement was mutually agreed upon by both parties.
According to ZKB, the increased payout provided UBS with a dividend yield of 3.4% at Monday’s closing price. This is significantly below the average dividend yield of European rivals but slightly above the consensus dividend yield of $0.53 per share.
