UBS agrees to pay 2019 dividend in two instalments at FINMA’s request
Following a request from FINMA, the UBS Board of Directors has proposed that shareholders approve that the previously announced dividend of USD0.73 for the financial year 2019 will be paid in two instalments, a dividend distribution of USD0.365 per share and the establishment of a special dividend reserve of USD0.365 per share.
The USD0.365 per share payment has been proposed to be paid on May 7th 2020, and the additional payment has been projected to be made on the 19th November 2020; this would be post-publication of UBS’s third quarter results.
UBS currently expects to report a first quarter 2020 net profit of around USD1.5 billion, with strong operating performance in all business divisions, even after accounting for credit loss expenses and own credit valuation adjustments. The firm expects its CET1 capital and CET1 leverage ratios at the end of the first quarter 2020 to be in line with its targets, and well above regulatory requirements, despite market conditions leading to a significant increase in credit and market risk RWAs. UBS will publish its first quarter 2020 results on 28th April 2020.
Axel A. Weber, Chairman of the Board of Directors, UBS, said “Our financial strength well above regulatory requirements and prudent risk management allow us to deliver on our current capital returns policy. Nevertheless, at FINMA's request, we have adjusted the 2019 dividend payout proposal given the high and unprecedented uncertainty.”
Sergio P. Ermotti, Group Chief Executive Officer, UBS, said “The first quarter of 2020 once again showed our business model's ability to perform well under a variety of market conditions. We have been supporting our clients with lending and advice, helping them to navigate in this very difficult environment.”
To the extent UBS decides not to proceed with the payment of the second instalment of the 2019 dividend to preserve capital, we will eliminate all cash payments of the 2020 GEB incentive award and allocate them into our deferred equity-based and contingent capital compensation plans. As needed, we also commit to take further measures as the year unfolds in all 2020 compensation decisions and review our policies for both management and the Board of Directors.
UBS supports the immediate measures announced by the Swiss Federal Council to support the economy with a focus on SME in conjunction with UBS and other Swiss banks. The firm has already provided CHF2.1 billion in liquidity to over 16,000 mostly small and medium-sized companies since the launch of the Swiss government-backed lending program on 26th March 2020. UBS has committed to make no profit from this support. Through our Swiss business domestically and our Investment Bank globally, we have provided liquidity to our corporate clients. Our Global Wealth Management business has provided advice to clients worldwide. Finally, UBS has committed to donate USD30 million towards COVID-19 aid projects to support the communities in which the firm operates.