UBS stocks soar as quarterly profit smashes forecasts, share buyback plans affirmed

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Shares in Switzerland’s biggest bank jumped 8% and were on track for their biggest one-day gain since March 2023

on Tuesday reported first-quarter profit that trounced forecasts and said it was sticking with plans for share buybacks over three years despite Swiss government proposals that would hike its capital requirements.

The bank’s first-quarter net income, which at $1.8-billion was nearly triple analyst forecasts, marked UBS’ first quarterly profit since taking over Credit Suisse. It was driven by cost-cutting and a boost from ‘non-core’ parts of the business that UBS inherited and wants to exit. Switzerland’s government recently unveiled plans to increase capital requirements for banks deemed “too big to fail,” raising concerns about whether they would impact UBS’s ability to reward shareholders. UBS executives have said they have major concerns about the plans.This includes a plan to repurchase up to $1-billion in shares this year as well as increase last year’s dividend of $0.70 per share by a mid-teen percentage in 2024.

The bank, however, flagged that lower lending and deposit volumes as well as lower interest rates in Switzerland could impact the bank’s wealth management division.

 

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