UBS Posts Q3 Loss On Credit Suisse Integration; Stock Up On Underlying Profit
Swiss banking major UBS Group AG reported Tuesday a loss in its third quarter, compared to prior year’s profit, reflecting the integration of Credit Suisse. However, the company recorded an underlying profit in the first full quarter since acquisition, and revenues climbed from last year with good growth in all segments. UBS shares were gaining more than 3 percent in the morning trading in Switzerland as well as in pre-market activity on the NYSE.
Sergio Ermotti, Group CEO, 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 stabilize the financial system in March…”
For the third quarter, net loss attributable to shareholders was $785 million or $0.24 per share, compared to last year’s profit of $1.73 billion or $0.52 per share.
Loss before tax was $255 million, compared to profit of $2.32 billion a year ago, driven by integration-related expenses.
Underlying profit before tax was $844 million, down from $2.04 billion a year ago.
Operating expenses climbed 97 percent from last year to $11.64 billion, largely due to the consolidation of Credit Suisse expenses and integration-related expenses.
Total revenues as reported grew 42 percent to $11.70 billion from last year’s $8.24 billion. Underlying revenues were $10.74 billion, up from $7.96 billion in the prior year.
Net interest income for the quarter grew to $2.11 billion from $1.60 billion.
Global Wealth Management revenues increased 21 percent year-over-year to $5.81 billion, mainly due to the consolidation of Credit Suisse revenues.
Personal & Corporate Banking revenues surged 156 percent to 2.56 billion Swiss francs, and asset management revenues climbed 46 percent.
Investment Bank revenues increased 6 percent to $2.15 billion.
Net new money was positive across all regions, with particular strength in APAC.
Net new deposits were $33 billion across Global Wealth Management and Personal and Corporate Banking, with $22 billion from Credit Suisse clients.
Annualized gross run-rate saves at the end of the third quarter of 2023 were around $3 billion, achieving its year-end target one quarter earlier than initially communicated. UBS expects further progress in the fourth quarter of 2023.
In Switzerland, UBS shares were trading at 22.69 Swiss francs, up 3.70 percent. In pre-market activity on the NYSE, the shares were trading at $25.16, up 3.33 percent.
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