UBS Starts Planned $2 Billion Share Buyback Amid Capital Debate

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UBS Starts Planned $2 Billion Share Buyback Amid Capital Debate.

stock :: 2025-06-30 :: source - bloomberg

By Noele Illien

(Bloomberg) -- UBS Group AG is launching a previously-announced share buyback of as much as $2 billion, amid uncertainty over the bank’s longer-term payout plans.

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The buyback is expected to kick off on July 1, UBS said in a release on Monday. The bank reiterated that it will “communicate its 2026 capital return ambitions with its fourth quarter and full-year 2025 financial results early next year.”

The Zurich-based bank is facing sharply higher capital requirements as a result of government regulation proposals unveiled earlier this month, casting doubt over investor returns beyond 2025. A draft reform bill that could see the bank having to maintain as much as $26 billion in extra capital will go through parliament in the coming years.

UBS’s share price has been hit by the Swiss capital reform, with the stock down slightly down this year to date, compared with a rise of about 30% for the wider European banking industry. The bank’s leadership is exploring ways to mitigate the impact and it also continues to seek to convince the government that the rules should be softened.

In February, the bank said it aimed to buy back up to $3 billion of its own shares this year. It has so far completed one third of that in the first half of the year as planned.

Analysts have warned that the capital reform plan could crimp the bank’s ability to make investor payouts, with a number reducing their buyback estimate to $3 billion starting from 2026.

The Swiss government is finalizing the draft law to be sent to parliament, which is expected to debate them in 2027 though the new law likely won’t take effect before 2029. As UBS can lobby lawmakers, there’s a chance that the draft will be watered down. The government has proposed a phase-in period up to 8 years once the changes are agreed.