The collapse of Greensill Capital was a disaster for investors, but bank giant UBS (NYSE:UBS) is out to make things right. Well, mostly, anyway. And the news of a planned payout for investors in that case did some nice things for UBS shares, which were up just over 2% in Monday afternoon’s trading.
When Greensill Capital collapsed, it took quite a few funds down with it, including funds that were connected to Credit Suisse. So, when UBS took over, it also inherited some of the problems that came with Credit Suisse, like Greensill. Now, however, UBS is stepping up and making investors whole—well, mostly—by offering a 90% redemption on the net asset value as of February 25, 2021.
The offer will be valid until July 31, so for those who held funds connected to Greensill, now’s the time to get on that. However, reports note that this may not be the end for UBS here; legal claims connected to Greensill remain to be addressed. These claims could do some damage, with early estimates suggested at “…substantially exceed(ing) the level of provisions” set aside to address them.
Big Spending Doesn’t Balk Investors
That’s quite a payout, but reports note that that’s not the only set of checks that UBS will be writing short-term. UBS is firing up a share buyback program backed by as much as $1 billion this year. It’s already bought back a little over $50 million in shares, and the combination of share buybacks and dividends is fueling a lot of investor interest in UBS shares.
Is UBS a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on UBS stock based on seven Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 58.12% rally in its share price over the past year, the average UBS price target of $31.66 per share implies 2.08% upside potential.
