Shares in Swiss bank UBS, whose U.S. operations are based in Stamford, rose on Friday as investors welcomed its pledge to start paying dividends again, though its plans to trim its scandal-hit investment bank failed to go as far as some had hoped, Reuters reports.
At an investor event in New York on Thursday, UBS said it would cut investment bank risk-weighted assets by almost half and shift focus back to its core business of managing the assets of the rich as it pared its profitability targets.
UBS said it would propose a dividend of 0.10 Swiss francs per share for 2011, earlier than many analysts had expected, and implement a progressive capital return program thereafter.
UBS, which until a recent $2 billion rogue trading scandal had just started to restore client confidence shaken by a 2008 government bailout, made its last cash dividend in 2006, when it paid out 2.20 francs a share.
“The return to a dividend this year was a genuine surprise. It is only a token dividend, but they are two years ahead of what most analysts expected,” said Jon Peace, banking analyst at Nomura in London.
“It’s quite symbolic, especially in a year when other banks are under pressure to cut their dividend right down. The fact they have gone the other way will be remembered by investors.”
UBS shares were up 1 percent by 0937 GMT, outperforming a flat European banking sector index (.SX7P).
