UBS flags $3 billion in new buybacks by end-June after forecast-beating quarter
UBS Reports Strong Second-Quarter Results and Announces Share Buybacks
By Ariane Luthi
Profit Growth and Performance Highlights
ZURICH, July 29 (Reuters) - UBS booked a 17% jump in second-quarter profit on Wednesday, ahead of expectations, and said it plans to buy back shares worth $3 billion by the middle of next year at the latest.
Switzerland's biggest bank said it had seen robust broad-based growth, particularly in wealth management and for its investment bank. Its trading division delivered record second-quarter revenue, in line with strong Wall Street bank earnings earlier this month.
Net profit attributable to shareholders came in at $2.8 billion versus a forecast of $2.39 billion in a company-provided poll of analysts.
"Strong results in the second quarter and healthy capital generation have further fortified our balance sheet for all seasons and allow us to continue deploying financial resources towards profitable growth opportunities," UBS CEO Sergio Ermotti said in a statement.
Analyst Reactions and Share Price Movement
Analysts described the results and the buybacks as encouraging and welcome, and UBS shares climbed 3.5% in morning trade.
But some analysts also noted that the stock has had a 28% run-up over the past three months.
"We assess the bank's development positively, but consider the current share price to be fair," Zuercher Kantonalbank said in a note to clients.
Wealth Management and Regional Performance
For the current quarter, the bank said it expects market conditions to remain broadly constructive, though uncertainty remains high.
UBS said net new assets for its global wealth management division came in at $36 billion during the quarter, led by inflows of $14.3 billion in Switzerland.
Americas Division and Advisor Numbers
The Americas had an inflow of $1 billion — the second positive quarter in a row after a run of outflows due to the loss of some relationship managers. That was better than some expectations for a return to outflows.
Profit before tax in the Americas surged 47% year-on-year, the bank said, though the number of advisors remained below the second-quarter level of 2025.
Artificial Intelligence Initiatives
UBS also stressed it was investing in artificial intelligence to position the bank for the future, saying it had embarked on nine large-scale initiatives.
Share Buybacks and Capital Requirements
Share Buyback Program Details
SHARE BUYBACKS CONTINGENT ON CAPITAL DEBATE
Of the new $3 billion share buyback program, UBS intends to repurchase at least $1 billion over the next three months.
The plans follow $3 billion worth completed in July, and analysts had forecast UBS would conduct some $4.45 billion worth of buybacks during 2026.
Swiss Banking Rules and Capital Buffer
UBS reiterated that the amount and pace of buybacks would depend on its short-term financial performance as well as the outcome of Swiss banking rules being debated in response to the 2023 collapse of Credit Suisse and its subsequent takeover by UBS.
Concerned about the risks to the Swiss economy should UBS collapse, the government has sought to make the bank hold around $20 billion in additional Common Equity Tier 1 capital — a stance that UBS has said is excessive and would damage it competitively.
Lawmakers are expected to water down that requirement as they begin drafting the bill next month, as many fear requiring a permanent buffer of this scale could scare off UBS' investors.
Integration of Credit Suisse and Cost Savings
Credit Suisse Integration Progress
The integration of Credit Suisse is on track to be completed by the end of 2026, the bank said.
Cost Savings and Workforce Reduction
UBS added that it had made additional gross cost savings of $1.1 billion in the second quarter, bringing cumulative gross savings to $12.6 billion.
It also said it is well positioned to outperform its 2026 exit rate capital return target of about 15%.
UBS, which has steadily reduced headcount after taking over Credit Suisse, cut staff levels by about 2,500 full-time employees in the quarter, bringing the bank's internal workforce below 100,000 for the first time since the takeover.
Cost-Income Ratio Improvement
The bank reported a cost-income ratio of 72.9% for the second quarter, down from 80.5% a year earlier and beating a consensus forecast of 75.6%.
(Reporting by Ariane Luthi; Editing by Edwina Gibbs)