UBS posts first loss since 2017 due to Credit Suisse integration

afr.com:

UBS posted its first quarterly loss in almost six years, as the ongoing absorption of Credit Suisse drags on the Swiss lender’s performance.

The Zurich-based bank said it had a net loss of $US785 million ($1.2 billion) for the three months to September, after including total integration-related expenses of $US2 billion.

CEO Sergio Ermotti is a UBS veteran who was brought back to oversee the Credit Suisse deal. Bloomberg

UBS chief executive Sergio Ermotti is seeking to chart a path through the biggest merger in finance in decades, cutting more than $US10 billion in costs and readying the combined bank for a strategic revamp due to be announced in February. The bank’s shares have gained by about 30 per cent this year as investors back Ermotti’s plan to integrate Credit Suisse’s profitable businesses while winding down the rest.

“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,” Ermotti said in a statement on Tuesday.

The key wealth management unit saw pre-tax profit of $US1.01 billion, lower than estimates. The unit saw $US22 billion in net new client funds, and Credit Suisse’s wealth management business saw positive flows for the first time in a year and a half. Profit at the asset management unit also came in lower than expected.

UBS said ongoing uncertainty over the economic outlook, including central bank rate increases and geopolitical tensions, may affect wealth management clients’ willingness to conduct transactions in the fourth quarter.

UBS said it accelerated the wind-down of assets inherited from Credit Suisse that it doesn’t want to continue,