UBS and other multinationals announce share buyback programmes: a windfall for shareholders and pension funds

To this end, a second trading line for UBS shares will be established on the Swiss stock exchange from Wednesday. The bank also regularly buys back shares it wants to take off the market.

With undistributed profits. This can be distributed as dividends, invested in the business, used to strengthen the capital base or for share buybacks.

A company that can afford such a program is in solid shape; This is the message to investors. “Many European banks have benefited from the turnaround in interest rates, made huge profits and are buying back their own shares on a large scale. To remain attractive to investors, UBS needs to keep up,” explains Andreas Venditti (51), equity analyst at Vontobel.

On April 10, the Federal Council will present its ideas for too big to fail regulation. And so we also define UBS’s capital requirements. “I certainly assume UBS at least has an idea of ​​what’s going to happen,” Venditti says. There’s also money UBS could make from sales of CS businesses that it no longer wants to continue operating. “Reducing the balance sheet strengthens capital ratios,” says Venditti.

Shareholders and therefore many pension funds. Dividends must be taxed as income, whereas shares sold are not. Additionally, a share repurchase program also tends to support the share price.

These are usually destroyed unless there is another big bank to buy. However, shareholders must formally agree to the disposal. Owners will be asked about the buyback program starting at the 2025 general meeting. Advantage to shareholders: Earnings per share increase as the number of shares in circulation decreases.

A lot. ABB announced a new project at the end of March and Swiss Life also completed a new project. Nestlé, Novartis, Logitech and Sonova, among many other companies, also operate these practices.

No. Because the fundamental question arises as to why a company doesn’t invest the money better in its business. Or do more for the environment, for example. For example, Nestlé is researching healthier foods or Novartis is trying to develop more effective drugs. But even critical shareholders are not fundamentally opposed to such programs: “If it is economically viable for the company and the climate strategy is correct, a share buyback program that also leads to a capital reduction for Actares can be justified,” explains Roger Said, managing director (53) of the Actares shareholders’ association when asked.