Switzerland’s largest bank UBS posted a loss of $785 million for the third quarter. This is due to the $2.1 billion in costs associated with the bank’s takeover of rival Credit Suisse. Analysts in a UBS survey had expected a loss of $444 million.
First positive results
“We are integrating Credit Suisse quickly and in the first full quarter after the acquisition we achieved underlying profitability for the group,” said UBS CEO Sergio Ermotti.
Credit Suisse ran into such serious problems in March this year that it began to threaten the financial stability of the global banking sector. The Swiss government, central bank, and regulators stepped in and negotiated a rescue of the bank in the form of a takeover by rival UBS.
The solution was the first merger of two global and systemically important banks. UBS is seeking stability following the acquisition.
The group’s wealth management division raised $22 billion in new funding in the past quarter. Of this, $3 billion came from Credit Suisse. Analysts at Goldman Sachs had expected the entire group to reach $14 billion in new funding.
UBS has over five trillion dollars in assets under management since the acquisition. Using higher-than-market interest rates on deposits, it is trying to recover from the outflow of client money from Credit Suisse. It is also trying to retain clients who would have had funds in both banks and may now be trying to spread the risk.
Source Czech Press Office