General view of the UBS building in Manhattan on June 5, 2023 in New York City.
Eduardo Munoz Alvarez | Press View | Corbis News | Getty Images
UBS posted a $28.88 billion profit on its first-quarter earnings on Thursday after Switzerland’s biggest bank completed its takeover of troubled rival Credit Suisse.
Analysts had forecast a net profit of $12.8 billion for the three months to the end of June, according to a Reuters poll.
UBS said the result primarily reflected negative goodwill of $28.93 billion on the Credit Suisse acquisition. Underlying profit before tax, which excludes negative goodwill, integration-related expenses and acquisition costs, came in at $1.1 billion.
Negative goodwill represents the fair value of the assets acquired in the merger other than the purchase price. UBS paid a discount of 3 billion Swiss francs ($3.4 billion) to acquire Credit Suisse in March.
UBS CEO Sergio Ermotti said in a statement: “Two and a half months after closing the Credit Suisse acquisition, we wasted no time in delivering value for all our stakeholders from one of the largest and most complex bank mergers in history.” are doing.”
“We are winning back customer trust, reducing costs and taking necessary actions to create economies of scale that will allow us to better focus our resources and target investments for future growth “
Credit Suisse’s veteran domestic banking unit will be fully integrated into UBS, the group also announced on Thursday, with the merger of the legal entities expected to close in 2024. Ermotti said the bank’s analysis determined that this was “the best outcome for UBS, our stakeholders and the Swiss economy.”
The acquisition of Credit Suisse was part of an emergency rescue deal brokered by Swiss authorities during a weekend in March. Earlier this month, UBS announced it had terminated a 9 billion Swiss franc ($10.24 billion) loss protection agreement and a 100 billion Swiss franc public liquidity backstop that the Swiss government agreed to in March when it acquired Credit Suisse. Used while expressing. ,
“Clients will continue to benefit from enhanced offerings, specialist capabilities and global reach, while receiving the premium level of service they expect,” Ermotti said of the integration of Credit Suisse’s Swiss banking division.
“Our strong capital base will enable us to keep our combined credit risk unchanged while maintaining our risk discipline.”
UBS delayed reporting its second-quarter results – which were initially scheduled for July 25 – until the completion of the Credit Suisse acquisition on June 12.
Last quarter, UBS surprised with a 52% annual drop in net profit due to legacy litigation related to US mortgage-backed securities.
Shares of UBS closed Wednesday’s trading up nearly 30% since the start of the year, according to Eikon.
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