Swiss banking powerhouse UBS has unveiled plans to kickstart a share buyback program worth up to $1 billion in the latter half of 2024, London Insider reported.
This announcement follows the bank’s surprising performance in the fourth quarter of the fiscal year 2023, where it posted a net loss of $279 million.
Remarkably, this figure outperformed the market’s expectations of a $372 million loss.
This marks the second consecutive quarter of losses for UBS, primarily attributed to the significant costs associated with integrating its domestic rival, Credit Suisse.
UBS’s acquisition of Credit Suisse was finalized in the previous year, a deal expedited by the Swiss government to avert a potential collapse of the local banking industry.
The third quarter of the previous fiscal year saw UBS report a net loss of $785 million, partly due to the integration expenses associated with the Credit Suisse merger, totaling $2 billion.
The bank is now focusing on completing the merger of these two financial giants by the end of the second quarter of 2024.
With the successful integration, UBS anticipates realizing substantial benefits in terms of cost, capital, and funding efficiencies in 2025 and 2026.
CEO Sergio Ermotti reflected on this pivotal year for UBS, stating, “2023 was a defining year in UBS’s history with the acquisition of Credit Suisse.
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.”
Despite the challenging financial landscape, UBS reported fourth-quarter revenues of $10.86 billion, a slight dip from the $11.7 billion reported in the preceding quarter.
Concurrently, the bank’s CET1 capital ratio, an indicator of liquidity, increased from 14.4 percent to 14.5 percent.
Ermotti outlined the bank’s future direction, stating, “As we move to the next phase of our journey, we will focus on restructuring and optimizing the combined businesses.
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.”
In summary, UBS navigated a challenging year, marked by losses and integration efforts, while maintaining its position as a financial powerhouse poised for future growth and stability.