Reuters reports on 29 Aug, the Swiss mega bank UBS Group (UBSG.S) will announce its first earnings after the takeover of the rival Credit Suisse (CSGN.S) from being blown over due to its debt and internal issues earlier this year. The UBS Q2 numbers have been delayed by over a month due to complexity of the merging.
Credit Suisse already expected a heavy loss, causing everyone to continue pulling out the money despite the rescue that Swiss authorities arranged. Its 500 billion francs of assets under management could possibly shrink further.
Wealthy clients often have many accounts spread over banks. Some might want to leave UBS as their account will be merged with Credit Suisse that some had escaped from. A 100 billion francs outflow is expected by Deutsche Bank’s analyst.
This week, many are expected to hear UBS’s CEO decision on what to do with Credit Suisse’s business. Whether it be a spin off, floating or go full integration. At the same time, Swiss politicians campaigned against it in national elections, concerning thousands of jobs being axed as a result.
UBS announced in March that it expected more than $8 billion cost saving of which 75% of the reduction would come from a layoff. Analysts estimated there’ll be 30,000 to 35,000 jobs cut while a 10,000 cut alone would be in Switzerland. Credit Suisse had 48,000 staff at the end of Q1 which many had already departed from the company mostly voluntarily. Altogether, there would be around 120,000 staff after the merger.
UBS is expected to report $33.45 billion in net profit for Q2, according to analysts, but warn that this is a time-off boost in the bottom line and complexity in the merger could distort the main picture.
The details on the non-core unit or the unwanted Credit Suisse assets including loans, structured products and other legacy assets are still unknown, whether the size, scale, speed or how long it’ll wind down and additional cost associated.
