UBS Group AG Chief Executive Officer Sergio Ermotti said the lender’s share buyback plans are temporarily suspended and not canceled as it grapples with the huge integration of Credit Suisse Group AG.
(Bloomberg) — UBS Group AG Chief Executive Officer Sergio Ermotti said the lender’s share buyback plans are temporarily suspended and not canceled as it grapples with the huge integration of Credit Suisse Group AG.
Ermotti, who returned to lead the bank through the emergency takeover, said that it’s still too early to say when buybacks will resume, and that it needs more visibility on the numbers and plans related to the deal. He spoke in a Bloomberg TV interview on Tuesday.
“We are reiterating our intention to have a progressive cash dividend increase every year and we definitely have an intention to resume share buybacks when its appropriate,” Ermotti said.
UBS froze its buyback when it announced the government-backed takeover of its biggest rival last month. The deal is transforming UBS from a stable wealth manager with predictable profit and capital return policies to a bank in restructuring mode that has said it may need up to four years to integrate Credit Suisse.
The solidity of the balance sheet and liquidity are critical in its considerations for resuming buybacks, Ermotti said.
The bank is not ruling out a potential recession later this year or early next year, Ermotti also said. Reiterating comments made by other UBS executives, he said that UBS will take its time in considering the future of Credit Suisse’s Swiss business.
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