UBS has posted a net profit of $28.8 billion for Q2 2023, which came with its first quarterly numbers after completing the takeover of rival Credit Suisse. The astronomical number was reached due to a one-off gain with lower acquisition costs than the value of Credit Suisse.
UBS Gained from the Credit Suisse Takeover
According to the official numbers posted today (Thursday), the Swiss generated a total revenue of $9.5 billion against the previous quarter's $8.7 billion. After "negative goodwill" of $28.9 billion from the Credit Suisse acquisition, its operating profit swelled to over $29.2 billion. Its underlying pre-tax profit, which excludes negative goodwill, integration-related expenses, and acquisition costs, was reported at $1.1 billion.
The net profit of UBS was $1.02 billion in the first quarter of the year and $2.1 billion in the second quarter of the previous year. There was an annual drop of 52 percent in Q1 net profit due to litigation costs related to US mortgage-backed securities.
"Two and a half months since closing the Credit Suisse acquisition, we are wasting no time in delivering value for all our stakeholders from one of the biggest and most complex bank mergers in history," said the CEO of UBS, Sergio Ermotti.
"We are winning back the trust of clients, reducing costs, and taking the necessary actions to create economies of scale that will allow us to better focus our resources and target investments for future growth."
UBS to Absorb Credit Suisse
Along with the financials, UBS revealed that it would fully absorb Credit Suisse's domestic banking unit. The merger is expected to close in 2024.
"Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders, and the Swiss economy," added Ermotti. "Clients will continue to receive the premium level of service they expect, benefiting from enhanced offerings, expert capabilities, and global reach."
UBS bought its arch-rival Credit Suisse last March for 3 billion Swiss francs in a hasty deal urged by the Swiss government. The authorities wanted to avoid a banking crisis in the country and granted an emergency greenlight that bypassed the shareholders' approval of both banks.
However, many feared that a merger would result in the loss of thousands of jobs.
Furthermore, UBS is expecting cost-savings of about $10 billion by the end of 2026 from the deal, which enlarged from an earlier estimate of $8 billion by 2027. Most of the savings would result from the reduced headcount.
UBS has posted a net profit of $28.8 billion for Q2 2023, which came with its first quarterly numbers after completing the takeover of rival Credit Suisse. The astronomical number was reached due to a one-off gain with lower acquisition costs than the value of Credit Suisse.
UBS Gained from the Credit Suisse Takeover
According to the official numbers posted today (Thursday), the Swiss generated a total revenue of $9.5 billion against the previous quarter's $8.7 billion. After "negative goodwill" of $28.9 billion from the Credit Suisse acquisition, its operating profit swelled to over $29.2 billion. Its underlying pre-tax profit, which excludes negative goodwill, integration-related expenses, and acquisition costs, was reported at $1.1 billion.
The net profit of UBS was $1.02 billion in the first quarter of the year and $2.1 billion in the second quarter of the previous year. There was an annual drop of 52 percent in Q1 net profit due to litigation costs related to US mortgage-backed securities.
"Two and a half months since closing the Credit Suisse acquisition, we are wasting no time in delivering value for all our stakeholders from one of the biggest and most complex bank mergers in history," said the CEO of UBS, Sergio Ermotti.
"We are winning back the trust of clients, reducing costs, and taking the necessary actions to create economies of scale that will allow us to better focus our resources and target investments for future growth."
UBS to Absorb Credit Suisse
Along with the financials, UBS revealed that it would fully absorb Credit Suisse's domestic banking unit. The merger is expected to close in 2024.
"Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders, and the Swiss economy," added Ermotti. "Clients will continue to receive the premium level of service they expect, benefiting from enhanced offerings, expert capabilities, and global reach."
UBS bought its arch-rival Credit Suisse last March for 3 billion Swiss francs in a hasty deal urged by the Swiss government. The authorities wanted to avoid a banking crisis in the country and granted an emergency greenlight that bypassed the shareholders' approval of both banks.
However, many feared that a merger would result in the loss of thousands of jobs.
Furthermore, UBS is expecting cost-savings of about $10 billion by the end of 2026 from the deal, which enlarged from an earlier estimate of $8 billion by 2027. Most of the savings would result from the reduced headcount.
