The Swiss bank UBS wants to fully integrate the competitor Credit Suisse, which was acquired earlier this year, into its own company. The financial group announced this in its quarterly figures. With that merger, UBS wants to reduce costs by 10 billion dollars (9.2 billion euros) over the next two and a half years.
UBS took over Credit Suisse in March, forced by the Swiss government. The latter bank was about to collapse because many account holders panicked and took their money away. The question for a long time was whether UBS would divest parts of that competitor or allow them to continue to exist independently, with speculation mainly about a split from the division that Swiss itself serves.
Now UBS announces that the two banks will continue to exist separately until the formal merger in 2024, but will merge afterwards. The Credit Suisse brand will then continue to exist until all clients of that bank have been transferred to UBS, which is expected to happen in 2025.
“This combination reinforces our status as a leading global company that our home country of Switzerland can be proud of,” said UBS CEO Sergio Ermotti, who replaced Dutchman Ralph Hamers as chief executive following the tumultuous acquisition of Credit Suisse.
At the same time, the acquisition gave UBS a huge profit in the second quarter. Pre-tax income rose to $29 billion. It is the highest profit for a bank in the second quarter ever, calculated financial news agency Bloomberg.
That profit is mainly due to the difference between the acquisition price of USD 3 billion for Credit Suisse and the much higher value of that bank’s loan portfolio. Dissatisfied investors have already filed lawsuits because they think the acquisition price for Credit Suisse is too low. UBS also reported that customers of the asset management division had placed much more money with the investment bank.
Credit Suisse’s asset management business continued to see a steady outflow of money. But the rate at which customers moved their money was slower in the second quarter than in March, UBS reported. That bank also states that confidence among major Credit Suisse customers has increased somewhat since the summer.
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2023-08-31 06:34:22
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