The performance of UBS shares was worse than that of arch-rival Credit Suisse over the past two years. But there is one point that speaks in favor of holding the UBS stock.
Both Swiss big banks have plenty of problems to solve. UBS grapples with law cases in France and the U.S. while Credit Suisse lags its own profitability goal. The smaller of the two also has already made three changes to the executive board this year.
Much More Generous
But while UBS shares have seen very little in terms of upside movements since the last financial crisis, there is one point where the Swiss No. 1 outpaces its Paradeplatz rival: the payout ratio. UBS is giving back much more money to its shareholders than Credit Suisse.
Analysts at Trefis established in a report published by «Forbes» that UBS in the spring of 2019 paid four times as much in dividend to its shareholders than Credit Suisse.
Bumper Year 2019?
If share buybacks are taken into account, both banks are likely to be more generous for the year 2019. Credit Suisse Chairman Urs Rohner and CEO Tidjane Thiam are likely to pay out a total of $1.4 billion.
But the owners of UBS shares will get a much larger handout still, with double the amount of Credit Suisse slated for distribution. And given that UBS is worth only 50 percent more than Credit Suisse, the expected dividends are all the more enticing.
