Credit Suisse: UBS makes its first loss since 2017 – Economy

UBS comes with the takeover of the Credit Suisse progressing better than expected. Renovation costs caused the Swiss asset management giant to make a loss for the first time in six years between July and September. But the austerity measures are taking effect faster than expected. In addition, millionaires and billionaires contributed money to Credit Suisse for the first time in a year and a half, as UBS announced on Tuesday.

“We are implementing the integration of Credit Suisse quickly,” explained CEO Sergio Ermotti, who was specifically responsible for the Credit Suisse integration UBS had been retrieved. Overall, the major Swiss bank posted a deficit of $785 million from July to September. Conversion costs, among other things, had a negative impact. In the same period last year, UBS – at that time without Credit Suisse – made a profit of $1.73 billion.

But adjusted pre-tax profit for the entire group reached $844 million in the third quarter, exceeding its own forecast. One driver here was cost reductions. By the end of the third quarter, UBS had achieved savings of around three billion dollars and had already achieved its target for the year as a whole. The bank expects further progress in the current quarter. “UBS has made significant progress since the transaction was completed, but still faces an enormous task,” said Vontobel analyst Andreas Venditti. In over-the-counter trading, UBS shares climbed 1.8 percent.

Thousands of jobs are being lost

The first major digital bank storm in history forced the Swiss government to take action in March. Practically overnight, she orchestrated a takeover of Credit Suisse by UBS. But the first merger of two globally systemically important banks is only worthwhile if expenses are cut. The group wants to reduce gross costs by more than ten billion dollars by the end of 2026.

A large part of this is likely to come from job cuts. Alone in the Switzerland According to previous information, the group wants to lay off 3,000 employees. In addition, there are job cuts in other parts of the world, including through voluntary departures and early retirement. However, the bank still did not provide any group-wide figures. At the end of the third quarter, the merged group employed 115,981 people, compared to 119,100 at the middle of the year.

At Wall Street houses Bank of America, JP Morgan and Wells Fargo, increased interest income as a result of the US Federal Reserve’s sharp tightening policy boosted quarterly profits. At Deutsche Bank, however, profits fell by eight percent due to poor business in investment banking.