UBS posts record quarterly profit of more than $26bn after taking over Credit Suisse

MADRID, 31 Ago.

UBS posts record quarterly profit of more than $26bn after taking over Credit Suisse


The Swiss bank UBS closed the second quarter of the year, the first after the acquisition of its rival Credit Suisse, with an attributable net profit of 28,875 million dollars (26,494 million euros), compared to the result of 2,108 million dollars (1,934 million euros) recorded by the entity in the same period of 2022.

The profit of UBS in the second quarter reflects a positive accounting impact of an extraordinary nature amounting to 28,925 million dollars (26,540 million euros) thanks to the negative goodwill linked to the absorption of Credit Suisse, while the integration of the entity rival accounted for costs of 830 million dollars (762 million euros) and credit losses subtracted 740 million dollars (679 million euros).

"Two and a half months since the closing of the Credit Suisse acquisition, we are wasting no time in delivering value to all of our stakeholders from one of the largest and most complex bank mergers in history," said Sergio Ermotti, CEO of the entity.

In the second quarter, UBS's turnover reached 9,540 million dollars (8,753 million euros), which implies an improvement of 7% compared to the same period in 2022, including a 3% growth in interest income net, up to 1,713 million dollars (1,572 million euros) and 8% of commission income, up to 5,175 million dollars (4,748 million euros).

In this way, in the first six months of 2023, the Swiss bank obtained an attributable net profit of 29,904 million dollars (27,438 million euros), compared to the result of 4,244 million dollars (3,894 million euros) recorded in the first half of 2022. Likewise, the turnover of UBS remained stable at 18,284 million dollars (16,776 million euros).

The CEO of UBS highlighted that in the second quarter, after the purchase of Credit Suisse, net deposit inflows for the combined group amounted to 23,000 million dollars (21,104 million euros), of which 18,000 million dollars (16,516 million euros) came from the wealth management area of ​​Credit Suisse and the Swiss Bank.

"While asset outflows from Credit Suisse's Wealth Management division continued in the second quarter, they did so at a slower pace compared to prior quarters and turned positive in June," Ermotti noted, adding that "Throughout July and August 2023 we recorded new net new money inflows of $8 billion (€7.34 billion) in the combined wealth management business.

Regarding the integration of Credit Suisse, the executive indicated that the objective is to complete it substantially "by the end of 2026" and announced the intention to achieve gross cost reductions of more than 10,000 million dollars (9,175 million euros) by then.

On the other hand, it is expected that the accumulated expenses related to the integration will be largely offset by the effects of accumulation of approximately 12,000 million dollars (11,010 million euros) related to the fair value adjustments applied to the financial instruments of amortized cost .

Also, as part of the integration, the entity plans to simplify its legal structure, including the merger of UBS AG and Credit Suisse AG scheduled for 2024.

Thus, excluding integration-related expenses and cumulation effects, the goal is to achieve a cost-to-income exit ratio of less than 70% by the end of 2026, and a CET1 capital ratio of around 15%.

In addition, the UBS CEO has announced that the domestic operations of Credit Suisse (Schweiz) will be fully integrated into UBS in 2024, although the Credit Suisse brand will remain in place until the migration of operations is complete in 2025.

"Full integration is the best outcome for UBS, for our stakeholders and for the Swiss economy," said Sergio Ermotti, for whom this full integration will reinforce the strengths that make UBS the leading bank in Switzerland.

"In Switzerland, UBS and Credit Suisse Swiss Bank will operate separately until their planned legal merger in 2024. The Credit Suisse brand and operations will remain in place until we complete the migration of clients to our system, which we expect to happen in 2025," he specified.