UBS to raise dividend, exceed buyback after deal collapsed

The Zurich-based lender will propose a dividend of 55 US cents a share at its annual meeting. PHOTO: UBS

ZURICH - UBS Group plans to raise the dividend for this year by 10 per cent and will probably exceed a target for share buybacks, as it returns excess capital to investors following the cancellation of its Wealthfront acquisition.

The Zurich-based lender will propose a dividend of 55 US cents a share at its annual meeting, up from 50 US cents a year earlier, it said in a statement on Tuesday.

It also expects share repurchases to exceed a target of US$5 billion (S$7 billion) for 2022. UBS has already bought back US$4.1 billion worth of shares as at Sept 9.

The move comes after the Swiss firm this month called off the US$1.4 billion acquisition of US robo-adviser Wealthfront as valuations for tech stocks tumbled.

The deal would have been chief executive Ralph Hamers' biggest transaction since becoming CEO less than two years ago, and was the centrepiece of his focus on broadening UBS's wealth-management offering beyond the traditional customer base through the use of digital platforms.

Founded in 2008, Wealthfront was an early robo-adviser, using algorithms to help users manage money. The acquisition would have added over US$27 billion in assets under management and more than 470,000 clients in the United States for UBS.

Mr Hamers has said the bank must embrace a broader base of customers, even if it means pushing lower-margin, automated products that are not the hallmark of UBS' personalised offerings.

Mr Hamers said in May that UBS was "as much of a US player as we are a Swiss player" and the bank could "absolutely" compete with Wall Street titans on advising the rich. BLOOMBERG

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