The number one of the bank in Switzerland also said in a statement to have earned a net profit of $ 1 billion in the first quarter, well below expectations, but evokes "strong capital inflows" over the same period testifying to the confidence of customers despite the current turbulence.

UBS points to "a net inflow of new money for Global Wealth Management of USD 28 billion, of which USD 7 billion flowed in the last ten days of March, following the announcement of the acquisition of Credit Suisse".

For the first quarter, analysts surveyed by the Swiss agency AWP expected a decline in net profit to around $ 1.7 billion (1.5 billion euros), against $ 2.1 billion a year earlier.

Net income was cut by litigation provisions - increased by $665 million - to settle an old dispute related to the subprime crisis in the United States. The bank is in advanced discussions with the US Department of Justice on the subject and reports "progress towards a settlement" of this case.

Leader

Regarding the acquisition of Credit Suisse, the new CEO Sergio Ermotti, recalled to positions he had already held to steer the delicate merger, said he was "convinced that this transaction will contribute to strengthening the leading position of the Swiss financial center and will benefit the entire economy".

UBS CEO Sergio Ermotti at a prese conference in Zurich, March 29, 2023 © ARND WIEGMANN / AFP/Archives

This combination "presents a unique opportunity to create significant long-term value for all stakeholders," he said in the statement.

Investors are now on the lookout for any additional information he will be able to give during a lengthy 90-minute conference call with banking industry analysts scheduled to begin around 07 GMT.

UBS agreed on March 19, under pressure from the Swiss authorities, to buy its compatriot for 3 billion Swiss francs and with solid financial guarantees from the federal government and the central bank, in the event of an unpleasant surprise in Credit Suisse's books.

Without this rescue, the second largest Swiss bank would probably have been in default on 20 or 21 March, President Alain Berset recently explained.

With the takeover, UBS's profile has changed, says Andreas Venditti, an analyst at Vontobel. UBS is moving from a "capital-generating company" with high returns on capital "to a complex restructuring story," he said.

Complex integration

Credit Suisse's quarterly results, published on Monday, showed the urgency and difficulty of the task ahead of UBS. "We are aware of the great complexity involved in the integration and restructuring of Credit Suisse," UBS reiterated on Tuesday.

Credit Suisse clients fled the bank. Capital withdrawals in the first quarter amounted to 61.2 billion Swiss francs, in addition to the 110.5 billion already extracted in the fourth quarter. And, despite a slowdown, the situation did not reverse after the announcement of the takeover.

UBS Chairman Colm Kelleher and CEO Sergio Ermotti at a press conference in Zurich, March 29, 2023 © ARND WIEGMANN / AFP/Archives

To carry out the integration, UBS has recalled Sergio Ermotti. At the helm from 2011 to 2020, he led a major restructuring that breathed new life into the banking giant brought to its knees during the 2008 financial crisis and saved in extremis by the federal state.

By joining Credit Suisse, "we should strengthen our international leadership in wealth management, with approximately USD 5 trillion in invested assets," UBS said. "We should also confirm our position as the leading universal bank in Switzerland and strengthen our complementary capabilities in investment banking and asset management," the banking giant said.

But the juggernaut that will emerge from this takeover is also worrying in Switzerland, where there are fears for jobs as well as the weight of the new entity in the Swiss economy. Together, the two banks had around 120,000 employees worldwide at the end of 2022, including 37,000 in Switzerland.

© 2023 AFP