- The loss was due to $2 billion in expenses related to the Credit Suisse integration, with the bank reporting underlying operating profit before tax of $844 million.
- UBS completed the takeover of its troubled domestic rival in June after agreeing to an emergency rescue deal brokered by Swiss authorities in March.
The logo of Swiss bank UBS is seen in Zurich, Switzerland on March 29, 2023.Thank you for reading this post, don't forget to subscribe!
Dennis Balibous | reuters
UBS on Tuesday reported a wider-than-expected third-quarter net loss of $785 million, as it works to integrate fallen rival Credit Suisse.
Analysts polled by Reuters had predicted the Swiss banking giant would post a quarterly net loss of $444 million, according to a survey compiled by Reuters.
The loss was due to $2 billion in expenses related to the Credit Suisse integration, with the bank reporting underlying operating profit before tax of $844 million.
Here are some other highlights:
- Group revenue totaled $11.7 billion, up 23% from $9.54 billion in the second quarter.
- The CET1 capital ratio, a measure of bank liquidity, was 14.4%, unchanged from the previous quarter.
- Credit Suisse Wealth Management generated positive net new money inflows for the first time since Q1 2022, contributing to $22 billion of inflows for UBS Global Wealth Management.
“We are working rapidly on the integration of Credit Suisse and have delivered underlying profitability for the group in the first full quarter following the acquisition. Our clients have maintained their trust and confidence in us, resulting in strong inflows into wealth management. “And our Swiss franchise has contributed,” CEO Sergio Ermotti said in a statement.
“We are optimistic about our future as we build an even stronger and safer version of the UBS that was called on to stabilize the financial system in March and that is something all our key stakeholders can be proud of.”
UBS completed the acquisition of its troubled domestic rival in June and announced in August that it had terminated a CHF 9 billion loss protection agreement and a CHF 100 billion public liquidity backstop that had been in place at the time the emergency rescue was agreed in March. Were installed.
The bank’s shares rose to their highest point since late 2008 in August after it reported a net profit of $28.88 billion in second-quarter earnings results as a result of negative goodwill over the Credit Suisse acquisition.
Negative goodwill represents the fair value of the assets acquired in the merger other than the purchase price. UBS paid a discounted sum of 3 billion Swiss francs ($3.33 billion) to acquire Credit Suisse in March in a deal brokered by Swiss authorities to avert the collapse of the prestigious but scandal-plagued lender. Can be stopped.
The stock price has declined slightly since then, but remains up more than 27% year to date.
UBS is in the process of fully integrating Credit Suisse’s Swiss banking unit – a major profit center – and is expected to cut a huge proportion of the old bank’s workforce.
UBS reported $33 billion of net new deposits across its global wealth management and personal and corporate banking (P&C) divisions, with $22 billion coming from Credit Suisse clients and positive deposit inflows to P&C in September. This happened a month after UBS announced its decision to integrate with the domestic bank.
The bank also announced earlier this year that it is targeting gross cost savings of at least $10 billion by 2026, when it expects to complete the integration of all Credit Suisse group businesses.