{"id":55481,"date":"2023-08-31T20:44:31","date_gmt":"2023-09-01T00:44:31","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/ubs-reports-29-billion-profit-after-buying-credit-suisse\/"},"modified":"2023-08-31T20:44:34","modified_gmt":"2023-09-01T00:44:34","slug":"ubs-reports-29-billion-profit-after-buying-credit-suisse","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=55481","title":{"rendered":"UBS reports $29 billion profit after buying Credit Suisse"},"content":{"rendered":"
\n

UBS on Thursday reported a huge profit bump in the second quarter from acquiring Credit Suisse, as the Swiss banking giant decided to integrate the local banking operation it had previously considered spinning off.<\/p>\n

UBS said its net profit soared to $28.88 billion, up from $2.11 billion in the previous quarter. The profit was entirely driven by the $28.93 billion of negative goodwill from buying Credit Suisse for more than $3 billion with the backing of the Swiss government. <\/p>\n

\n

Read:<\/strong> Here\u2019s how UBS\u2019s $29 billion profit ranks<\/p>\n

Its underlying pretax profit of $1.14 billion missed analyst expectations by about $400 million.<\/p>\n

CEO Sergio Ermotti said again on Thursday that Credit Suisse would not have been able to survive on its own, given its \u201csevere flaws.\u201d <\/p>\n

UBS shares
\n UBSG,
\n +6.05%<\/bg-quote><\/p>\n

UBS,
\n +5.61%<\/bg-quote>
\n in Switzerland rose 6%, and the stock is up 36% this year.<\/p>\n

Revenue rose to $9.54 billion from $8.03 billion, with $497 million coming from a month of controlling Credit Suisse. Of course, costs also rose, and the number of personnel climbed to 119,100 from 45,286 at the end of the first quarter. Its cost-to-income ratio surged to 88.9% from 70.6% in the year-ago quarter.<\/p>\n

Credit Suisse\u2019s wealth management unit recorded $30 billion in outflows, but UBS\u2019s global wealth management pulled in $16 billion. So far, both banks have bought in $8 billion this quarter.<\/p>\n

\u201cWealth management revenue held up reasonably well, and we view the net client inflows recorded in the quarter as confirmation that UBS has managed to stabilize the ship and a major positive,\u201d said Johann Scholtz, an equity analyst at Morningstar. Analysts also mentioned that UBS plans to give information on stock buybacks with its third-quarter report.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n
<\/div>\n<\/figure><\/div>\n

UBS said it will hold onto the Credit Suisse banking operation in Switzerland, that it had considered spinning off. UBS said it would have struggled as a separate entity, with low profitability and a substantial funding gap. It will merge the bank with its own in Switzerland next year.<\/p>\n

Ermotti said there will be 1,000 job cuts due to the merger of the two banks, and he said there will be another 2,000 job cuts in other Credit Suisse businesses <\/p>\n

UBS said it\u2019s aiming to achieve cost of reductions of $10 billion by the end of 2026.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

UBS on Thursday reported a huge profit bump in the second quarter from acquiring Credit Suisse, as the Swiss banking giant decided to integrate the local banking operation it had previously considered spinning off. UBS said its net profit soared to $28.88 billion, up from $2.11 billion in the previous quarter. The profit was entirely […]<\/p>\n","protected":false},"author":1,"featured_media":48456,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-55481","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nUBS reports $29 billion profit after buying Credit Suisse | iFintechWorld<\/title>\n<meta name=\"description\" content=\"UBS on Thursday reported a huge profit bump in the second quarter from acquiring Credit Suisse, as the Swiss banking giant decided to integrate the local\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=55481\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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