Swiss banking giant UBS reported a 255 million US dollar (£206 million) pre-tax loss in the third quarter as it shed some 4,000 jobs globally, cut costs faster than expected, and reaped billions in asset inflows while moving forward with its government-orchestrated merger with rival Credit Suisse.
The Zurich-based bank said underlying profit before taxes came in at 884 million dollars (£714 million) in the first full quarter since the merger was completed in June.
Government authorities in Bern shepherded through the deal with bank chiefs to stave off a collapse of Credit Suisse and avert a financial crisis.
Our third quarter financial results are now available. Read more in our news release here: https://t.co/tRqZ6HEBc1 pic.twitter.com/k5LBrJpwBE
— UBS (@UBS) November 7, 2023
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UBS, which is striving to get rid of overlap between the two former rivals, said underlying operating expenses of 1.2 billion dollars (£97 million) in its non-core, legacy operation stemmed from efforts to reduce headcount and outsourcing costs.
The bank said it is one quarter ahead of schedule in reaping savings from the restructuring operations, and headcount was down more than 4,000 during the third quarter.
UBS tallied 33 billion dollars (£26.7 billion) in net new deposits in its wealth management and personal and corporate banking segments, two-thirds of that from Credit Suisse clients.
UBS chief executive Sergio Ermotti said in a statement: “We are executing on the integration of Credit Suisse at pace and have delivered underlying profitability for the group in the first full quarter since the acquisition.”
In our first full quarter since the Credit Suisse acquisition, we’ve delivered underlying profitability and maintained strong client momentum while executing on our integration plans at pace.
Hear more from UBS CEO Sergio P. Ermotti on our third quarter results. pic.twitter.com/bKiof1GEAGAdvertisement— UBS (@UBS) November 7, 2023
Shares in the bank rose more than 3% in Tuesday morning trading on the Six Swiss Exchange in Zurich, and have gained more than 32% so far this year.
Deutsche Bank analysts Benjamin Goy and Sharath Kumar, who affirmed their “buy” rating on UBS shares, said the pre-tax figures topped the consensus analysts’ expectations and said: “UBS reported another good quarter, in our view.”
UBS has said the two banks will operate separately until a planned legal merger next year, and the Credit Suisse brand will remain “until we complete the migration of clients to our system, which we expect in 2025”.
