UBS to Launch $1 Billion Share Buyback despite Q4 Losses

by Arnab Shome
  • The banking giant aims to close the Credit Suisse merger by Q2 2024.
  • It was the second consecutive quarterly loss of the company due to the expenses of Credit Suisse merger.
UBS
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The Swiss banking giant, UBS will initiate a share buyback program of up to $1 billion in the second half of the year, as it ended the fourth quarter of the fiscal year 2023 with a net loss of $279 million, beating the street estimates of $372 million in losses.

The Massive Expense of Credit Suisse Merger

It is UBS's second consecutive quarterly loss as the bank incurs massive costs of integrating its local rival, Credit Suisse. UBS completed the acquisition of Credit Suisse last year in a deal expedited by the Swiss government to prevent the collapse of the local banking industry.

The bank posted a net loss of $785 million in the third quarter of the last fiscal year after factoring in $2 billion in expenses related to the Credit Suisse merger.

Now, UBS is planning to complete the merger of the two banking giants by the end of the second quarter of 2024. With the merger of the two legal entities, UBS expects to realize “the next phase of the cost, capital, and funding” in 2025 and 2026.

“2023 was a defining year in UBS’s history with the acquisition of Credit Suisse,” UBS’ CEO, Sergio Ermotti, said. “Thanks to the exceptional efforts of all of our colleagues, we stabilized the franchise and have made tremendous progress in the integration.”

“In addition, clients entrusted us with $77 billion of net new assets since the acquisition and relied on our advice in a challenging geopolitical and macroeconomic environment.”

Incoming Restructuring

UBS reported Q4 revenue of $10.86 billion, a fall from $11.7 billion in the previous quarter. Meanwhile, the CET1 capital ratio, which measures the bank’s liquidity, jumped to 14.5 percent from 14.4 percent.

“As we move to the next phase of our journey, we will focus on restructuring and optimizing the combined businesses,” Ermotti added. “While our progress over the next three years will not be measured in a straight line, our strategy is clear. With enhanced scale and capabilities across our leading client franchises and improved resource discipline, we will drive sustainable long-term growth and higher returns.”

The Swiss banking giant, UBS will initiate a share buyback program of up to $1 billion in the second half of the year, as it ended the fourth quarter of the fiscal year 2023 with a net loss of $279 million, beating the street estimates of $372 million in losses.

The Massive Expense of Credit Suisse Merger

It is UBS's second consecutive quarterly loss as the bank incurs massive costs of integrating its local rival, Credit Suisse. UBS completed the acquisition of Credit Suisse last year in a deal expedited by the Swiss government to prevent the collapse of the local banking industry.

The bank posted a net loss of $785 million in the third quarter of the last fiscal year after factoring in $2 billion in expenses related to the Credit Suisse merger.

Now, UBS is planning to complete the merger of the two banking giants by the end of the second quarter of 2024. With the merger of the two legal entities, UBS expects to realize “the next phase of the cost, capital, and funding” in 2025 and 2026.

“2023 was a defining year in UBS’s history with the acquisition of Credit Suisse,” UBS’ CEO, Sergio Ermotti, said. “Thanks to the exceptional efforts of all of our colleagues, we stabilized the franchise and have made tremendous progress in the integration.”

“In addition, clients entrusted us with $77 billion of net new assets since the acquisition and relied on our advice in a challenging geopolitical and macroeconomic environment.”

Incoming Restructuring

UBS reported Q4 revenue of $10.86 billion, a fall from $11.7 billion in the previous quarter. Meanwhile, the CET1 capital ratio, which measures the bank’s liquidity, jumped to 14.5 percent from 14.4 percent.

“As we move to the next phase of our journey, we will focus on restructuring and optimizing the combined businesses,” Ermotti added. “While our progress over the next three years will not be measured in a straight line, our strategy is clear. With enhanced scale and capabilities across our leading client franchises and improved resource discipline, we will drive sustainable long-term growth and higher returns.”

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