UBS Group is set to raise its ordinary dividend from $0.51 to $0.55 per share, which is 10% more than the previous year.
The board of the Swiss bank plans to put the proposal for shareholder approval at its annual general meeting to be held next year.
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The Swiss wealth management giant also expects its share repurchases for this year to surpass the $5bn target.
Until 9 September this year, the bank has bought back $4.1bn of shares.
UBS in a statement said: “We will provide guidance on next year’s capital return at our fourth quarter earnings presentation and expect to continue to have share repurchases and a progressive dividend.”
UBS witnessed a 1.2% surge in pre-market activity after it announced to boost its dividend, reported CNBC.
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By GlobalDataMichael Klien, an analyst from Zurich Cantonal Bank (ZKB), has termed the move a ‘surprise news’.
In a research note, Klien said: “We assume that this increase is related to the capital released due to the termination of the Wealthfront acquisition.”
According to ZKB, the increased payout has enabled UBS to have a 3.4% dividend at Monday’s closing price, which is a little lower than the average of its European counterparts but a little higher than the agreed $0.53 per share.
The latest move comes shortly after UBS cancelled the previously announced deal to buy American automated wealth management firm Wealthfront for $1.4bn.
The mutually scrapped deal was reached in January this year and it involved the purchase of Wealthfront by UBS Americas.
