UBS sets out to nearly double its share buyback program and increase its dividend after a successful run in the global market that has helped lift annual profits at Switzerland’s largest bank.
The bank said on Tuesday that it intends to buy up to $5 billion in shares over the next 12 months, up to the $2.6 billion it bought in 2021, and bringing the total size of a refund program to a premium. proposed capital to $7.6 billion, almost double from $4. bn is initially marked.
The pledge comes as the bank’s full-year results underscore how UBS, which has focused on expanding its flagship wealth management business, has benefited from a resurgence in the market. global market last year.
Shares of UBS were up 6% in early trading.
The wealth management business, which caters to affluent clients, recorded a 19% increase in pre-tax profits in 2021 from a year earlier. The bank said it is maintaining guidance for the growth of the department.
The bank’s full-year net profit rose to $7.5 billion last year from $6.6 billion in 2020, when it announced a full-year dividend of 50 cents a share. This is up from 37 cents in 2020.
However, the group’s fourth-quarter profit was hit by slowing operations and a new $740 million in litigation fees related to a French tax lawsuit. A Paris court upheld an earlier ruling in December and ordered the bank to pay a $2 billion fine for helping a French client illegally shield assets from tax authorities.
Its investment banking delivered better-than-expected results in the fourth quarter.
In line with the plans announced to investors, UBS has announced a series of operational goals and objectives – placing the digitalization of its business at the heart of its grand overall strategy. CEO Ralph Hamers’ first since taking control in November 2020.
“For the second year in a row, we met our targets, maintained cost discipline, and saw strong contributions from all regions and divisions,” said Hamers. “This is just the beginning of what we can do. To make the most of the momentum we’ve built, our updated goals focus on where we see the greatest opportunity. ”
The bank said it is increasing its target return on core single-equity tier capital from 12-15% to 15-18% annually, after posting a return of 17.5% last year. Overall, UBS-managed assets rose to a new all-time high of $4.5 billion.