UBS sticks to $3bn buyback despite capital changes, global uncertainty

Lucerne — UBS chair Colm Kelleher on Thursday reiterated the Swiss bank’s intention to buy back as much as $3bn of its issued shares in 2025, despite looming capital rule changes in the country and global economic uncertainty.

The bank plans to repurchase $1bn in shares in the first half of 2025 and as much as $2bn in the second half of the year.

“In the absence of any significant, immediate changes to the current capital regime, we remain committed to returning capital to our shareholders,” Kelleher said at the bank’s AGM in Lucerne.

Proxy adviser Ethos opposed the buyback plans, describing them as a provocation in the prevailing political context and said capital should be reserved for stability.

“We consider capital destruction inappropriate and urge the board to stop its buyback activities, which only benefit the variable remuneration of our executives and some short-term orientated investors,” Ethos Foundation CEO Vincent Kaufmann said at the AGM.

UBS shareholders approved the proposed 2025 share buyback programme with 93.5% of votes cast at the meeting.

The Swiss government is due to present a proposal on new capital rules in early June, aimed at strengthening financial stability and preventing crises such as the 2023 collapse of lender Credit Suisse, which was bought by UBS in an emergency takeover that year.

While emphasising the bank’s Swiss roots and its “long-standing partnership” with Switzerland, Kelleher cautioned against stronger capital rules, calling over-regulation “a very big risk to the long-term success of UBS”.

“UBS is already hampered by the existing regulatory Swiss finish,” he said. “Adding another Swiss finish on top — while other financial centres are easing regulations — would harm UBS, the Swiss financial centre and the broader economy.” Swiss finish refers to Swiss capital requirements and other regulations that are more stringent than in other jurisdictions.

The year will be a very challenging year for markets, with much uncertainty, Kelleher added. 

“The global macroeconomic and geopolitical environment is less stable, as we observed over the past week,” said UBS CEO Sergio Ermotti.

The bank was moving towards fully integrating Credit Suisse while positioning itself for growth, Ermotti added, particularly in the Asia-Pacific and Americas regions.

Reuters