Due to CS integration: UBS loses $255 million

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UBS experienced high losses in the third quarter of 2023. However, when integration costs were taken into account, a significant profit before tax was achieved. The big bank had promised only a balanced, adjusted pre-tax result.

As a result, the new UBS Group reported a loss of $785 million in the third quarter, it announced on Tuesday. This quarter is the first quarter where CS is fully included. Only June was included in UBS’s financial statements in the second quarter.

In the third quarter alone, the major merged bank announced it was cutting more than 4,000 jobs worldwide. UBS announced Tuesday that the number of jobs has decreased by more than 13,000 in total at the end of 2022, compared to the total workforce at separate companies UBS and CS. This number also includes outsourced work and consultants.

It’s also reporting billions of dollars in cost savings and is already ahead of its own plan.

22 billion net new money inflow

UBS estimates a pre-tax loss of $255 million in the third quarter. The adjusted (excluding costs of CS integration) result was plus 844 million. The group’s pre-tax profit, adjusted for takeover effects, was $1.1 billion in the previous quarter.

According to the statement, the situation at Credit Suisse continues to stabilize. It is said that new money has entered CS’s asset management in a quarter for the first time since the first quarter of 2022. The bank talked about its efforts to recover CS clients’ assets.

Overall, UBS Group had net new inflows of $22 billion in its core business, global asset management, in the third quarter. As of the end of September, UBS managed a total of $5.373 billion in assets at the overall bank level. At the end of June, the figure was still 5.530 billion.

CEO is satisfied

UBS boss Sergio Ermotti (63) was delighted that the bank had delivered a positive adjusted result in the first quarter since taking over CS. “We look to the future with confidence because we are building a stronger and more secure UBS that all key stakeholder groups can be proud of.”

UBS is currently cautious about the market environment. It was stated that the outlook for economic growth, asset valuations and market volatility are difficult to assess. Ongoing geopolitical tensions, especially in the Middle East and Ukraine, have further increased the uncertainty regarding the economic outlook.

In addition to normal seasonal factors, this is also likely to have an impact on customer transaction volumes in the Christmas quarter. The bank also assumes that customers will shift their cash deposits to higher-yielding investments, meaning net interest income in the current fourth quarter can be expected to be at the level of the previous quarter. (SDA/smt)

Source :Blick