Bloomberg News reports that the bank was cut to equal-weight from overweight by Morgan Stanley analysts led by Huw van Steenis. UBS may pay a dividend of 65 centimes per share this year, they wrote, down from 85 centimes in 2015, which included a special payout of 25 centimes. Analysts at Credit Suisse also cut their dividend estimate for this year, forecasting a payout of 60 centimes a share.
Investors have piled into UBS, enticed by a policy of returning at least half of the profit to shareholders, after Chief Executive Officer Sergio Ermotti unveiled his overhaul in 2012 to focus on wealth management. While the CEO told analysts on Tuesday that the bank still plans to maintain that payout ratio after profit slumped $64 in the first quarter, he declined to elaborate on the full-year dividend, citing tougher capital requirements.
“We think UBS has the potential for an appealing yield as it works through its issues,” van Steenis wrote in the note dated May 3. “However the environment and capital misses mean the odds for special” dividends “in the next three years are remote.”
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