Business Standard

UBS reports huge Q2 profit skewed by takeover, foresees $10 bn in cost cuts

But underlying profit before taxes came in at $1.1 bn, which excludes some $29 bn in negative goodwill, integration costs and other impacts of the Credit Suisse takeover

UBS-Credit Suisse

UBS-Credit Suisse

AP Geneva

Listen to This Article

Swiss bank UBS announced Thursday plans to save USD 10 billion in costs as it moves ahead with full integration of longtime rival Credit Suisse's domestic operations, as UBS released its first earnings report since the government-orchestrated merger to help stave off a possible global financial meltdown.
The announcement came as the Zurich-based bank reported a whopping USD 29 billion in pre-tax profit in the second quarter.
But underlying profit before taxes came in at USD 1.1 billion, which excludes some USD 29 billion in negative goodwill, integration costs and other impacts of the Credit Suisse takeover.
In a separate statement, Credit Suisse, calling itself a UBS subsidiary following the completion of the deal on June 12, announced a loss of 8.9 billion Swiss francs (USD 10.1 billion) as it wrapped up its accounting for all of 2023.
UBS appeared to make no mention of one of the major outstanding questions: how many of Credit Suisse's 50,000 employees would be kept on.
But it did say that it planned to substantially complete the integration of Credit Suisse's operations by the end of 2026, and achieve gross cost reductions of over $10 billion over that time.
CEO Sergio Ermotti, in a statement, said it would roll in Credit Suisse's domestic operations, in the midst of speculation they might be spun off or otherwise divested.
Our decision on Credit Suisse (Schweiz) AG follows a thorough evaluation of all available options," he said.
Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders and the Swiss economy.
UBS said the two banks will operate separately until a planned legal merger next year, and the Credit Suisse brand with its storied yet recently troubled legacy in Swiss finance would remain "until we complete the migration of clients to our system, which we expect in 2025.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Aug 31 2023 | 5:31 PM IST

Explore News