UBS, Which Took Over Troubled CS, Reports First Quarterly Loss in 6 Years

Recorded 1 Trillion Won Net Loss in Q3

Switzerland's largest bank, UBS Group, recorded its first quarterly loss since acquiring Credit Suisse (CS). It is the first time in six years that UBS has posted a net loss for a quarter.

On the 7th (local time), UBS Group announced in its earnings report that it recorded a net loss of $785 million (approximately 1.0238 trillion KRW) in the third quarter. This result reflects costs of $2.2 billion incurred during the ongoing business integration process between the two banks following the CS acquisition.

UBS Group expects the integration work with CS to continue until next year. Sergio Ermotti, CEO of UBS, stated, "Next year will be a pivotal year for the CS integration process," and predicted, "We will incur higher costs next year to achieve the synergies targeted for 2025-2026." UBS Group had recorded a net profit of $28.9 billion in the second quarter, the first earnings announcement after the CS acquisition, due to an increase in book asset value from the merger effect.

[Image source=EPA Yonhap News]

In its earnings press release, UBS explained that "CS's business is stabilizing," and that the Wealth Management (WM) division for global high-net-worth clients saw a net inflow of $3 billion in the third quarter, turning positive for the first time in a year. During the same period, UBS's WM division also recorded a net inflow of $22 billion.

UBS, Switzerland's top bank, acquired CS, which was on the brink of bankruptcy, in March for 30 billion Swiss francs (approximately 4.24 trillion KRW), and completed the final merger on June 12 with government guarantees and liquidity support from Swiss financial authorities.

With this merger, UBS was reborn as Switzerland's largest bank with total assets of 1.6 trillion Swiss francs and approximately 120,000 employees worldwide. However, challenges remain, including absorbing CS's bad assets and restructuring overlapping business operations. The group plans to manage UBS and CS as two separate banks, with each maintaining its own subsidiaries and branches. The completion of the bank merger within Switzerland is scheduled for next year, and the full absorption of the CS brand into UBS is planned for 2026.

Founded in 1856 as a Swiss railway business lender, CS entered personal finance in 1900 and later transformed into an investment bank, expanding its business. Once rivaling JP Morgan, CS suffered massive losses due to the Greensill scandal in the UK financial sector and the margin call incident involving the US hedge fund Archegos Capital. Amid these troubles, the collapse of the US Silicon Valley Bank (SVB) heightened the global banking crisis, leading to customer departures and capital outflows that pushed CS to the brink of bankruptcy, but it was revived through emergency support from authorities.

This content was produced with the assistance of AI translation services.