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BANK

UBS surprises with high first quarter profit

Swiss big bank UBS has reported a net profit of 988 million francs in the first three months of the year, far more than analysts had expected.

UBS surprises with high first quarter profit
Analysts were surprised by the size of the profit. Photo: UBS

The bank returned to profit after recording big losses at the end of last year in connection with the Libor rate-fixing scandal.

In the final quarter of last year UBS lost 1.9 billion francs. For the year as a whole losses totaled 2.2 billion. This included a 1.4 billion franc fine related to the Libor scandal.

But profit from January to March was down 4.5 percent on the same period last year.

AFP said the result was higher than expected by analysts polled by Swiss agency AWP, which had predicted on average a net profit of 510 million Swiss francs.

UBS said in a statement the bank had strong results across all its businesses, with very strong results in the Investment Bank division, which UBS is currently restructuring.

Wealth management had delivered the highest levels of quarterly net new money since 2007 and the highest quarterly profit since 2009.

Commenting on the results, CEO Sergio Ermotti said, “While it is too early to declare victory, we have shown our business model works in practice.”

“Although markets improved, we still saw challenges, so I am very pleased with our performance.”

Rival bank Credit Suisse last week posted a net profit for the first quarter of 1.3 billion francs – up from 44 million francs in the same period of 2012. 

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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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