- The loss was due to $2 billion in expenses related to the Credit Suisse integration, with the bank posting an underlying pre-tax operating profit of $844 million.
- UBS completed the takeover of its troubled domestic rival in June after agreeing to an emergency deal brokered by Swiss authorities in March.
A logo of the Swiss bank UBS is seen on March 29, 2023 in Zurich, Switzerland.
Denis Balibouse | Portal
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 Portal had expected the Swiss banking giant to post a quarterly net loss of $444 million in a survey conducted by the company.
The loss was due to $2 billion in expenses related to the Credit Suisse integration, with the bank posting an underlying pre-tax operating profit of $844 million.
Here are some other highlights:
- Total group revenue was $11.7 billion, up 23% from $9.54 billion in the second quarter.
- The common equity Tier 1 capital ratio (CET1), a measure of the bank’s liquidity, was 14.4%, remaining unchanged compared to the previous quarter.
- Credit Suisse Wealth Management generated positive net new money inflows for the first time since the first quarter of 2022, contributing $22 billion in inflows for UBS Global Wealth Management.
“We are rapidly progressing the integration of Credit Suisse and have achieved underlying profitability for the group in the first full quarter since the acquisition. Our clients have continued to place their trust in us, contributing to strong inflows in wealth management and our Swiss franchise,” CEO Sergio Ermotti said in a statement.
“We are optimistic about the future as we build an even stronger and safer version of the UBS that was called to stabilize the financial system in March and that all of our key stakeholders can be proud of.”
UBS completed the takeover of its troubled domestic rival in June and announced in August that it had terminated a 9 billion franc loss protection arrangement and a 100 billion franc public liquidity safeguard that were put in place when it agreed to the emergency rescue in March were.
The bank’s shares rose to their highest level since late 2008 in August after second-quarter results reported a net profit of $28.88 billion, reflecting negative goodwill in its Credit Suisse acquisition.
Negative goodwill represents the fair value of assets acquired in a merger in excess of the purchase price. UBS paid a discounted 3 billion Swiss francs ($3.33 billion) to acquire Credit Suisse in March. The deal was brokered by Swiss authorities to prevent the collapse of the famous but scandal-plagued lender.
The share price has weakened slightly since then, but is still up more than 27% year-on-year.
UBS is also in the process of fully integrating Credit Suisse’s Swiss banking unit – a key profit center – and is expected to cut a significant portion of the legacy bank’s workforce.
UBS reported $33 billion in net new deposits across its Global Wealth Management and Personal and Corporate Banking (P&C) businesses, with $22 billion coming from Credit Suisse clients and positive deposit inflows for P&C in September , a month after UBS announced the decision to integrate domestic bank.
The bank also said earlier this year that it is targeting at least $10 billion in gross cost savings by 2026 and hopes to have completed the integration of all Credit Suisse Group businesses.