UBS reports first profit since taking over Credit Suisse By Reuters

By Noele Illien

ZURICH (Reuters) -UBS reported net income of $1.8 billion for January-March, its first quarterly profit since it took over fallen rival Credit Suisse.

The net income attributable to shareholders for Switzerland’s largest bank was better than a company-provided consensus estimate of $602 million and compares with a profit of $1 billion in the same period a year earlier.

UBS also said on Tuesday that it had achieved an additional $1 billion in gross cost savings in the first quarter, taking total savings to $5 billion. It is aiming to achieve another $1.5 billion in savings by the end of the year.

The group’s wealth management arm reported $27 billion in net new assets for the first quarter of the year, compared to $22 billion for the three months prior.

But UBS flagged that lower lending and deposit volumes as well as lower interest rates in Switzerland could impact the bank’s wealth management division.

“In the second quarter of 2024, we expect a low-to-mid single-digit decline in net interest income in Global Wealth Management,” the bank said in a statement.

The first merger of two global systemically important banks – orchestrated by Swiss authorities who feared that scandal-ridden Credit Suisse was on the brink collapse – was completed last June after which UBS posted two consecutive quarters of losses due to the costs of absorbing its rival.

Despite the shot-gun nature of the takeover, investors have been upbeat about UBS’s prospects given the low acquisition costs and its huge increase in assets. Shares in the bank have climbed some 40% over the past year.

This year is expected to be a pivotal year for UBS as it tackles some of the trickier stages of integration such as combining separate IT systems and legal entities, as well as migrating clients from Credit Suisse to UBS.