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UBS Group to Pay 2019 Dividend Despite FINMA's Plea to Freeze

Zacks Equity Research

UBS Group AG UBS plans to distribute a dividend for 2019, amounting to more than 50% of the annual profits. The bank has proposed to pay a dividend of 73 cents per share, up 9.2% from the prior-year annual dividend. The news was reported by Reuters.

Amid the continued coronavirus spread in Switzerland, the Swiss Financial Market Supervisory Authority (“FINMA”) noted that the financial institutions are well-poised to deal with extreme stress scenarios. However, it suggested firms to be more prudent with their distribution policies, especially related to share buyback programs.

Per the article, the bank remains confident of its capital position and is strategically well-positioned to deal with the crucial conditions at present. Further, the article quoted a representative of the company, “UBS Group, as the largest Swiss bank, is in a position to support the economy while maintaining an appropriate dividend policy.”

Notably, the company paid its CEO 11% lower compensation for 2019. Further, the bank’s employee bonus pool slumped 14%. The payoffs took into account the relatively weak performance of the company in 2019. The company reported a net profit attributable to shareholders of $4.3 billion, down 4.7% year over year.

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Its peer, Credit Suisse CS, is also planning to distribute the 2019 dividend but has suspended its CHF 1.5-billion share buyback plan for 2020 as the pandemic continues to hamper economic conditions. Also, the company’s board would decide upon the dividend to propose for 2020 later this year. Barclays BCS and HSBC Holding HSBC are scheduled to pay dividends on Apr 3 and Apr 14, respectively.

UBS Group has lost 14.6% over the past six months compared with 33.9% decline of the industry it belongs to.

 

 

Currently, the company carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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UBS Group AG (UBS) : Free Stock Analysis Report
 
Credit Suisse Group (CS) : Free Stock Analysis Report
 
Barclays PLC (BCS) : Free Stock Analysis Report
 
HSBC Holdings plc (HSBC) : Free Stock Analysis Report
 
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Zacks Investment Research