2023-11-07 17:45:46
UBS suffered a net loss of $785 million in the third quarter, mainly due to Credit Suisse integration costs. These results include for the first time the performance of her unfortunate ex-competitor, in the process of integration, over the entire partial and do not really allow an annual comparison.
In the third quarter of 2022, the three-key bank recorded a net profit of $1.7 billion, but this partial only included the performance of UBS.
The basic profit before taxes for the entire new entity, excluding the effects linked to the integration of Credit Suisse, on the other hand stood at 844 million dollars (758 million francs) between July and the end of September, the Zurich establishment announced in a press release on Tuesday.
The net loss is higher than the forecasts of analysts consulted by the AWP agency and who expected on average a negative net result of 430 million.
Integration of Credit Suisse
“We are rapidly continuing the integration of Credit Suisse and have been able to be, for the first time since the takeover, profitable on a comparable basis and over an entire quarter,” said the CEO of UBS, Sergio Ermotti, cited in the document.
According to the Ticino boss, the establishment benefited from “continued customer confidence”, garnering net inflows of new money of 22 billion dollars in the wealth management activity, the establishment’s core business. , following 16 billion in the previous quarter. In this activity with wealthy clients, the Credit Suisse entity recorded liquidity inflows of 3 billion, following very heavy declines of 39.2 billion in the second partial.
Over the first nine months of the year, the group indicated that it had made gross savings of 3 billion linked to the integration of Credit Suisse and is counting on further cost reductions by the end of 2023. Charges linked to the integration amounted to 2 billion.
Already 13,000 positions eliminated
The bank also made progress in the sale of assets not part of its core business and placed in a bad bank unit, releasing 1 billion in hard capital (CET1) and reducing risk assets (RWA) by 6.4 billions of dollars. This toxic legacy still amounts to 30 billion and should be halved by 2026
Compared to the end of 2022, the banking giant’s combined workforce fell by 13,000 positions to 115,900 full-time equivalents at the end of September. Sergio Ermotti indicated at the end of August that the bank would cut 3,000 positions in Switzerland over the next two years. Worldwide, speculation suggests 35,000 positions will be cut.
Management expects a cost reduction of $10 billion by the end of 2026, compared to last year. The other financial objectives were also confirmed.
The integration of Credit Suisse, resumed in mid-March under the aegis of the Confederation when it was on the verge of bankruptcy, must continue in 2024 with the legal merger of the various subsidiaries and the start of client migration towards UBS in core activities. The Credit Suisse brand will be maintained until the transition of clients to UBS is finalized, scheduled for 2025.
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