UBS has 60 billion profits

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2022 was already a record year for UBS in terms of profits – 2023 could now outpace it. UBS reported a profit of US$7.6 billion last year. Now the profit can even go up to 60 billion! At least that’s the conclusion of analysts at JP Morgan, the leading US bank, as “Handelzeitung” wrote.

consolation for shareholders

However: It is purely accounting profit. This is because UBS pays significantly less for Credit Suisse than its bank reports equity. This is called “negative goodwill” and should yield high earnings per UBS share in 2023, according to analysts at JP Morgan. It’s at least a consolation for CS shareholders, whose shares will soon be converted into UBS shares.

However, UBS will not report such a huge profit in real terms. Because UBS has to take into account the billions of costs. On the one hand it covers the losses of CS, there are also restructuring costs, reserves for legal litigation and more. It is difficult to predict how high the acquisition costs will ultimately be. After all, UBS was able to owe CS 16 billion from CoCo bonds, a copy of which was declared by the financial supervisory authority (Finma).

year long road

According to JP Morgan analysts, it will take at least four years to reach, or even surpass, the record profit of 2022. By 2027, the wealth management business alone could generate $7 billion in pre-tax profits for CS-enhanced UBS, according to estimates.

The key to achieving this goal will be how smoothly the downsizing in CS and the integration of the Swiss business into UBS will go.

Is CS Switzerland going public?

There is also speculation that UBS will be a part of the Credit Suisse people, particularly the local business. According to online finance blog “Inside Paradeplatz”, UBS has commissioned leading US bank JP Morgan to review such an IPO.

The “Bloomberg” news agency expects the IPO of the CS Switzerland company to flow 10 billion francs into the UBS coffers. As a reminder, UBS paid $3 billion to take over CS. The prospective IPO makes it clear that it has acquired its competitor at a very affordable price.

Source :Blick