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UBS Group AG (UBS) to Pay Full 2019 Dividend Amid COVID-19 Crisis

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On Thursday, UBS Group AG (UBS - Free Report) became the first European bank to pay the full-year dividend for 2019 after receiving the approval of majority shareholders. The bank would pay the second half of its 2019 dividend which equates to 36.5 cents, despite the coronavirus pandemic-induced economic uncertainty.

This April, on a request from the Swiss Financial Market Supervisory Authority (“FINMA”), amid the continuous spread of coronavirus in Switzerland, UBS Group AG agreed to pay the dividend of 73 cents for financial-year 2019 in two instalments. The bank paid 36.5 cents per share in May and kept the reserve of 36.5 cents as a special dividend.

Swiss bank UBS Group AG remained confident of its capital position and was strategically well positioned to deal with the critical situation. The bank’s liquidity and funding profile are prudent for supporting clients and the economy with the payment of its full dividend.

Despite this, the bank changed its decision of dividend payment in compliance with FINMA’s request. It has suggested firms to be more prudent with their distribution policies, especially related to share-buyback programs.

Notably, an amount of $2.5 billion has been reserved by UBS Group AG for returning to shareholders next year.

The bank has provided full support to the economy with its lending facilities, in an effort to help combat the crippling impact of the coronavirus crisis. It is continuously providing loans to its clients in Switzerland and globally. Moreover, liquidity to SMEs and advisory services to corporate, institutional and wealth management clients were being inculcated by the bank globally.

UBS Group AG’s peer, Credit Suisse (CS - Free Report) , also paid half of its 2019 dividend worth 0.1388 Swiss francs per share in April and awaits the approval for the second tranche of the dividend payment at the meeting to be held next week. However, the bank suspended its CHF 1.5-billion share-buyback plan for 2020 in April as the pandemic continued to disrupt economic conditions.

Among others, in a coordinated move, Barclays (BCS - Free Report) , Royal Bank of Scotland (RBS), HSBC Holdings (HSBC), Standard Chartered and Lloyds Banking Group (LYG - Free Report) also suspended their outstanding 2019 dividend payments when the pandemic was at its peak in March and April.

UBS Group has gained 20.3% over the past three months on the NYSE compared with 19.6% growth of the industry it belongs to.

Currently, UBS Group AG carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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