UBS results for the first quarter of 2023 after the acquisition of Credit Suisse

UBS reported a 52% annual decline in net profit on Tuesday amid a longstanding litigation case, but emphasized that it is a “source of stability” for its clients during periods of high uncertainty.

These are the bank’s first results since announcing its acquisition of rival Credit Suisse.

UBS said net profit came in at $1.03 billion for the first quarter, well below analyst expectations of a net profit of close to $1.75 billion for the period, according to Refinitiv.

The hit to net income came from the $665 million increase in provisions after the US mortgage-backed securities litigation case.

Speaking to CNBC’s Jeff Catmore, UBS CEO Sergio Ermotti — who resumed his position on April 5 — said, “We’re in advanced discussions. Hopefully we can close this 15-year-old chapter very soon.” “

Ermotti also described the recent results as “very strong”.

“We saw some inflows from Credit Suisse, but more importantly we still saw even after the deal, we saw inflows, which is evidence that our clients think we are a source of stability.” he told CNBC.

“We are part of the solution, not part of the problem,” he added.

Here are some other highlights of the quarter:

• Revenue was $8.75 billion, compared to $9.38 billion a year ago
• Operating expenses were $7.2 billion from $6.6 billion a year earlier
• The Tier 1 capital ratio, which is a measure of banks’ solvency, was 13.9%, compared to 14.1% a year earlier.

The bank also said it had attracted $28 billion in net new funds into its global wealth management unit, of which $7 billion was recorded in the last 10 days of March – after announcing its acquisition of Credit Suisse.

Shares of UBS have jumped more than 10% since news of its beleaguered Swiss rival’s purchase last month. on time, UBS said that dealbrokered by Swiss regulators, will create a “leading global wealth manager” with more than $5 billion in total invested assets.

However, Barclays analysts said the market is “grossly underestimating” the complexity of integrating Credit Suisse into UBS, Reuters reported. Ermoti told CNBC on Tuesday that the merger should be completed in the second quarter.

“In the next couple of weeks I will redefine the target operating model for the future, (I) also come out with some regulatory announcements and clarity,” he said, adding that the merger with Credit Suisse is not a “risky” deal. will be handed over to shareholders.