UBS has achieved a historic milestone by recording a quarterly profit of US$29 billion, unprecedented in the banking industry, following the emergency takeover of Credit Suisse.
Consequently, the Zurich-based bank is reinforcing its dominant position as a global leader in wealth management.
With a target of surpassing US$10 billion in cost savings by 2026, the bank has already reported US$16 billion in net new money inflows for the quarter.
UBS CEO Sergio Ermotti, dedicated to executing the merger, stated, “This strategic move will bolster our standing as a world-class global enterprise.”
UBS shares rose 40% this year, surpassing JPMorgan Chase‘s US$14.3 billion profit in Q1 2021.
The bank will operate separately from Credit Suisse until the planned legal merger in 2024. Clients will be transferred to UBS systems in 2025.
The bank voluntarily relinquished a negotiated safety net, including US$9.4 billion in government protection, giving it more flexibility.
UBS is preparing investors for the integration process, which is expected to be substantially completed by the end of 2026.
The bank aims for a cost-to-income ratio below 70% by 2026 and anticipates a pre-tax profit around break-even in Q3.
It had informed that Credit Suisse’s asset reductions could reach US$13 billion, and legal liabilities could reach US$4 billion in the first year of integration.
The wind-down unit had approximately US$55 billion in risk-weighted assets at the quarter’s end, with about US$8 billion in positions removed.
UBS’s global wealth management business continued to record strong inflows, with US$16 billion being the highest second-quarter figure in over a decade.
Vontobel Holding AG analysts noted that UBS faces a huge task in restructuring Credit Suisse, requiring significant time and management attention.