Swiss banking giant UBS said Tuesday that its net profit fell 18 percent to 1.8 billion francs ($2 billion) in the first quarter, hurt by a tax charge and higher personnel costs.

"/> Swiss banking giant UBS said Tuesday that its net profit fell 18 percent to 1.8 billion francs ($2 billion) in the first quarter, hurt by a tax charge and higher personnel costs.

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BANK

Taxes hit UBS profits

Swiss banking giant UBS said Tuesday that its net profit fell 18 percent to 1.8 billion francs ($2 billion) in the first quarter, hurt by a tax charge and higher personnel costs.

Taxes hit UBS profits
UBS

Nevertheless, the result was slightly better than the 1.7 billion francs forecast by analysts for the period.

The group also recorded net new money of 22.3 billion francs in the first quarter, marking a recovery from a year ago when outflow reached 18 billion francs.

Group chief executive Oswald Gruebel said: “I am satisfied with our result considering market activity during the first quarter, and I am particularly pleased by the increase in net new money, confirming the return of client trust and confidence.”

UBS said it expected improvement in parts of its investment banking business for the coming quarter, but that competition for talent and salary increases would put pressure on its expenses.

BANK

Credit Suisse slashes jobs, branches to move ‘online’

Credit Suisse, Switzerland's second-biggest bank, said Tuesday it would reorientate its domestic services towards digital banking, with a quarter of its Swiss branches to close and hundreds of jobs at risk.

Credit Suisse slashes jobs, branches to move 'online'
A Credit Suisse branch. Photo: FABRICE COFFRINI / AFP

“In the last two years alone, use of online banking at Credit Suisse has grown by approximately 40 percent, while the use of mobile banking has more than doubled,” the bank said in a statement.

“The COVID-19 crisis has further accelerated these trends. In contrast, the number of visits to branches has been declining for years.

“Credit Suisse will introduce a new digital offering and a future-oriented branch concept at the end of October.”

The bank also plans to merge the activities of regional subsidiary Neue Aargauer Bank with those under the Credit Suisse brand to avoid duplication.

READ: How to open a bank account in Switzerland 

With its realignment, the bank intends to reduce annual costs by around 100 million Swiss francs ($110 million, 93 million euros) from 2022 onwards. It plans to cut the number of bank branches from 146 to 109.

Meanwhile up to 500 jobs could be axed, Andre Helfenstein, head of the bank's operations within Switzerland, told reporters during a conference call.

The restructuring costs are expected to be 75 million Swiss francs. “Digitalisation is happening all around us,” Helfenstein said in a statement.

“The changes we are making to our branch network — while simultaneously investing in digital solutions and in advisory services for clients with more complex needs — represent a logical step forward.”

In late July, the bank's new chief executive Thomas Gottstein unveiled his plans for Credit Suisse, which involved regrouping its different investment bank activities.

Gottstein took charge in February after Tidjane Thiam was ousted over a massive spying scandal.

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