UBS’s quarterly profit tops forecasts as investment bank shines

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UBS CEO Sergio Ermotti said that the first-half results reflected the ‘significant progres’ the bank had made since closing the Credit Suisse acquisition

on Wednesday posted a quarterly profit twice as high as the market forecast, buoyed by investment banking and larger-than-expected savings from the integration of its one-time rival Credit Suisse.

UBS acquired its long-time competitor last year in a rescue that was engineered by Swiss authorities when Credit Suisse collapsed after a string of financial setbacks and scandals. “We are now entering the next phase of our integration, which will be critical to realize further substantial cost, capital, funding and tax benefits.”

The bank has reduced non-core and legacy risk-weighted assets by 42 per cent since the second quarter of last year, including an $8-billion decline quarter-on-quarter, it added. UBS also saw moderate net interest income headwinds from ongoing mix shifts in Global Wealth Management and the effects of the Swiss National Bank’s second interest rate cut, not yet captured in UBS’s deposit pricing in personal and corporate banking. UBS is pricing in up to two more SNB rate cuts in 2024, UBS CFO Todd Tuckner said.

Investors warmed to the takeover, by this summer pushing up the value of UBS’s shares by more than two-thirds since it bought Credit Suisse in March 2023. However, UBS shares have since lost ground during recent turmoil in global markets.

 

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