UBS returns to profit post Credit Suisse takeover, shares surge

The announcement sent UBS shares soaring by more than 9%, igniting investor optimism. The Zurich-based lender reported a net income of $1.75 billion (€1.63 billion) for the first three months of the year, exceeding expectations and signaling a rebound after two consecutive quarterly losses. With earnings of 52 cents per share, UBS demonstrated resilience amidst cost-cutting measures, sending a positive signal to shareholders.

Total group revenues surged to $12.7 billion, a 15% increase from the previous quarter, while underlying operating expenses saw a 5% reduction. UBS’ capital position also strengthened, with its CET1 capital ratio climbing to 14.8%, up from 14.5% in the previous quarter, underscoring the bank’s robust financial health.

Key to UBS’ stellar performance was its wealth management division, which witnessed a remarkable 28% increase in total revenues, primarily driven by the integration of Credit Suisse revenues. The division attracted $27 billion (€25.1 billion) in net new assets, surpassing expectations and pushing total invested assets beyond $4 trillion, a feat equivalent to the GDP of Germany.

UBS has set ambitious targets for its wealth management division, aiming to exceed $5 trillion in invested assets over the next five years. Notably, the division has consistently generated over 50% of the bank’s overall revenue in the last two quarters of 2023.

Additionally, UBS’ personal and corporate banking division delivered robust performance, with total revenues soaring by 81%, largely attributable to the integration of Credit Suisse revenues.

Looking ahead, UBS anticipates a decline in net interest income in its wealth management and personal & corporate banking divisions due to the Swiss central bank’s interest rate cut in March 2024. Despite this, CEO Sergio Ermotti expressed confidence in the bank’s ability to navigate challenges, emphasizing the successful stabilization of Credit Suisse’s franchises.

UBS remains focused on its integration efforts, aiming to complete the merger with Credit Suisse by the end of 2026. The bank plans significant workforce reductions, targeting 50% to 60% of former Credit Suisse employees, with anticipated cost savings exceeding $10 billion by 2026.