UBS did not say today about what will happen to Credit Suisse’s Swiss business. This leaves the big question unanswered for now: Will UBS continue to operate as an independent bank in the future or not? And if so, in what form? UBS President Sergio Ermotti did not wish to comment for this morning. “All options are on the table,” Ermotti only confirmed in an interview with SRF Radio.
How things go on with Credit Suisse will be a very crucial point, because it involves thousands of jobs and countless locations within Switzerland. So that uncertainty remains with the staff and the public. But Ermotti promised the media today that he would comment in more detail on the acquisition in the coming weeks, as soon as possible.
Take over this summer
After all, UBS announced this morning that it intends to complete the acquisition in the second quarter, which is by the end of June. The bank also confirmed that the merger with CS will enhance its position as a leading global wealth manager. In light of this, Ermotti can hardly be pleased with the massive shrinkage of customer funds in CS.
Financially, UBS got off to a mixed start in the new year: UBS customers once again entrusted more money to them, especially after the acquisition of CS, the bank wrote. Of client inflows into the global wealth management business totaling $28 billion in the first three months, about $7 billion fell in the last 10 days of March — that is, after the Credit Suisse acquisition was announced.
However, this money does not come primarily from Credit Suisse, but primarily from international clients, for example in the USA and Asia. This shows that UBS is still popular with wealthy private clients around the world, although the acquisition of CS carries additional risks.
Less profit than the same quarter last year
However, at the same time, UBS is still fighting old cases from the 2008 financial crisis. So UBS is allocating an additional $665 million to open legal cases. This is one of the reasons why profits in the first quarter fell to just over $1 billion.
But even without the old issues, UBS posted lower earnings than it did in the same quarter a year earlier. The reasons for this are the weakness of the global economy and high interest rates. The environment for the financial sector, and therefore also for the new big bank in Switzerland, remains difficult.
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