Ubs, loss of EUR 279m in Q4. Buyback resumes in June

Loss in the fourth quarter and profit for the whole of 2023, a rising dividend, and a resumption of share buybacks. These are three of the main points that have emerged for Ubs, which is in the process of integrating Credit Suisse. The largest Swiss bank posted a net loss of $279m (€260m) in the last three months of last year, linked to the costs of the Cs transaction and the investment in the Swiss Six Group. On the other hand, there is a net profit of USD 29 billion for the year, which is, however, linked to the accounting effect of the difference between the value of the Cs assets and the price paid. If this effect is not taken into account, the 2023 net profit is about USD 100 million (EUR 93 million), compared to USD 7.6 billion in 2022.

The takeover in March last year of Credit Suisse, Switzerland's second-largest bank, which fell into crisis between late 2022 and early 2023, is a maxi-transaction that is causing Ubs to slow down at this stage. But it is also a step that will allow Ubs itself to strengthen its leadership in all its activities in the coming years, and in particular in the core business of asset management, reiterated Ticino-based Sergio Ermotti, ceo of Switzerland's leading bank. Among other things, the ceo emphasised, there was a net inflow of new funds for the group in 2023.

In the meantime, Ubs's top management intends to keep shareholder remuneration at a certain level and has therefore announced that the dividend will be USD 0.70 per share (+27%) and that it will resume share buybacks of up to USD 1 billion in the second half of this year. Despite this, Ubs shares in Zurich went down after the announcements, falling more than 4%. For one part of the analysts the results are below expectations, for another part they are above, and the selling on the stock is therefore taking profits, considering that the share has a gain of about 25% compared to a year ago.

Returning to Credit Suisse, the main challenges include merging IT systems, savings, and staffing levels. IT integration is an inevitable goal, but it takes time. Savings are necessary, since Credit Suisse's activities are loss-making and there are overlaps in structures. The top management of Ubs pointed out that there have already been savings of USD 4 billion in 2023 and that the goal is to reach a total of USD 13 billion by 2026. The workforce reduction is proceeding gradually. At the time of the acquisition of Credit Suisse, the total number of employees in the Ubs-Cs aggregate was about 120,000; by September last year the figure had dropped to 115,000 and by the end of 2023 the workforce was 112,000. For structures and employees, there will be further filings in the pipeline.