UBS shares jumped 4.9% to a 2008 high after the one-month delayed Q2 profit reported at $28.88 billion. It is the first quarter earnings report of the largest Swiss bank after acquiring the stricken Credit Suisse, while its subsidiaries’ still at loss over $10.54 billion in Q2.
UBS paid a discounted $3.4 billion to acquire Credit Suisse in March. The Swiss bank noted that the goodwill or a fair value of asset from acquisition had gone negative at $28.93 billion after the acquisition. Its profit before tax, which excludes negative goodwill and acquisition costs, came in at $1.1 billion.
“Negative goodwill is necessary to sustain $240 billion of risk-weighted assets. The inflow financial resource will restructure Credit Suisse business model that is no longer viable, while the Swiss bank division will still generate positive earnings even after 2022”, UBS’s CEO said.
UBS announced to fully absorb Credit Suisse on Thursday (31 Aug). UBS also announced its target cost saving at $10 billion by 2026, which would come from a heavy job with at least 1,000 redundancies and further 2,000 layoffs are expected in 2024.
A $28.88 billion net profit for the second quarter was higher than a net profit of $12.8 billion forecast by analysts in a Reuters poll.
Additionally, UBS’ CET 1 capital ratio, which is a measure to indicate bank liquidity, increased to 14.4% in 2Q23, compared to 14.2% in the second quarter of 2022.
