UBS Group AG, the Swiss banking behemoth, has posted its first quarterly deficit in almost six years, primarily due to the ongoing endeavor of merging Credit Suisse into its operations, as reported by The Guardian on Tuesday.
In the same report, the bank disclosed a net loss of $785 million for the quarter ending in September, which is nearly double the $444 million anticipated by analysts. UBS attributed the primary factor behind this loss to approximately $2 billion in expenses connected to the rescue and amalgamation of Credit Suisse.
The integration process has entailed substantial job reductions to curtail expenses and eliminate duplicated positions within the amalgamated entity. UBS verified that more than 4,000 jobs were eliminated during the third quarter, contributing to a total of 13,000 job cuts for this year.
Nonetheless, the bank emphasized its ability to attract new investments from customers in its wealth management business. UBS succeeded in winning back clients who had withdrawn their assets from Credit Suisse earlier in the year due to apprehensions about its stability.
UBS remains committed to the integration process, with the objective of constructing a more robust and resilient financial institution. The Guardian quoted Sergio Ermotti, the bank’s Chief Executive Officer, who conveyed his optimism regarding the future and the trust and confidence placed in UBS by its clients. The integration aims to streamline operations and harness the profitable aspects of Credit Suisse while winding down less favorable segments.
The merger between UBS and Credit Suisse, executed within tight time constraints, incurred an estimated $17 billion in expenses, encompassing costs related to legal matters, regulatory concerns, and asset and liability adjustments.
Despite the associated risks, UBS perceives this acquisition as a strategic business opportunity, as it acquired Credit Suisse for 3 billion Swiss francs.
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