UBS creates certainty: The domestic business of Credit Suisse will be integrated into the group.
UBS reported a net profit of $29 billion in the second quarter, inflated by the acquisition of Credit Suisse, and was able to keep its common equity tier 1 (CET1) ratio at a stable 14.4 percent, according to second quarter results released Thursday.
Credit Suisse, now a UBS subsidiary, reported a pre-tax loss of 4.3 billion francs in the same period, excluding the effects of the acquisition.
Ermotti Follows Baseline Scenario
UBS leadership around CEO Sergio Ermotti today created certainty about the future of Credit Suisse, who is following through with his «base scenario» of allowing its domestic business to be fully integrated.
The end of the historical bank won't come immediately with both operating as separate companies until the planned legal merger in 2024.
No Spinoff
The Credit Suisse brand and business activities will continue until the complex migration of its IT to UBS is completed, with a target date of 2025.
A spinoff of Credit Suisse Switzerland is definitely off the table. UBS thoroughly examined this option, concluding it would have struggled with low profitability and a size that was ultimately too small.
Save More and Faster
«Our decision on Credit Suisse Switzerland is based on a thorough review of all possible options,» Ermotti said. «Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders, and the Swiss economy.» He sees no issues with competition law for the domestic market, noting that UBS has only the third-largest branch network in Switzerland.
UBS didn't comment Thursday morning on expected job cuts in Switzerland, although it does want to save more and faster. It seeks to save $10 billion by 2026, tightening the belt from the previous goal of $8 billion by 2027.
