UBS reports $785m loss due to costs of Credit Suisse integration
UBS has reported a $785m (£637m) quarterly loss, its first in nearly six years, as the Swiss banking group counted the costs of rescuing its rival Credit Suisse earlier this year.
The loss was nearly double the $444m that analysts had forecast, with UBS saying it would have reported profits worth $844m in the third quarter had it not been for the $2bn in expenses linked to the emergency takeover.
Efforts to merge the two banks have involved brutal job cuts, designed to cut costs and to avoid duplicating roles across the new group. UBS bosses confirmed they had slashed more than 4,000 jobs between July and September, bringing total job losses to 13,000 so far this year.
However, UBS said it had attracted new customer cash into its wealth business. That included winning back clients who panicked and pulled their funds from Credit Suisse before its collapse in March, when the mini-banking crisis that primarily affected US lenders spread to Zurich.
“We have now stabilised Credit Suisse and continued to grow our franchise through new client acquisition and share of wallet gains, as well as the continued success of our client retention and win-back strategy,” UBS said.
Earlier this year, UBS bosses said they expected to take a $17bn hit from costs related to the rushed rescue deal, which was executed with only 48 hours of due diligence. That included $4bn in costs related to litigation, regulatory matters and other liabilities, and a further $13bn hit from asset and liability adjustments in the group.
While UBS bosses have acknowledged that the government-brokered deal came with risks, they ultimately defended the takeover, saying it presented a business opportunity for the bank, which bought Credit Suisse for the bargain price of 3bn Swiss francs (£2.7bn).
The UBS chief executive, Sergio Ermotti, said: “We are executing on the integration of Credit Suisse at pace and have delivered underlying profitability for the group in the first full quarter since the acquisition. Our clients have continued to place their trust and confidence in us, contributing to strong inflows across wealth management and our Swiss franchise.
“We are optimistic about our future as we build an even stronger and safer version of the UBS that was called upon to stabilise the financial system in March and one that all of our key stakeholders can be proud of.”