UBS reports net profit of $1.1 billion in the second quarter, beating Reuters forecast

ZURICH (Reuters) – UBS reported a net profit of $1.14 billion for the April-June period on Wednesday, the first results since the bank’s formal legal merger with its former rival Credit Suisse was completed.

Net profit attributable to shareholders for Switzerland’s largest bank compared with the $528 million estimate by analysts in a company-provided survey.

The bank also reported total group revenue of $11.9 billion, compared with the consensus figure of $11.6 billion.

“Our results for the first half of the year reflect the significant progress we have made since closing the acquisition as we meet all our commitments to our stakeholders,” UBS CEO Sergio Ermotti said in a statement.

“We are well positioned to meet our financial targets and return to the levels of profitability we delivered before we were asked to step in and stabilize Credit Suisse,” he added.

UBS also said it achieved additional gross cost savings of $0.9 billion, reaching about 45% of its cumulative annual gross cost savings ambitions.

UBS said the macroeconomic outlook is clouded by ongoing conflicts, geopolitical tensions and the upcoming US election. These uncertainties were expected to persist for the foreseeable future and would likely lead to greater market volatility than in the first half of the year.

The bank announced on May 31 that it had completed the merger of the main parent companies of UBS and Credit Suisse, which it acquired last year, after its longtime competitor collapsed following a series of financial failures and scandals.

UBS reported a profit of nearly $29 billion in the second quarter of last year, thanks to a huge one-off gain reflecting the fact that acquisition costs were well below Credit Suisse’s value.

Swiss authorities oversaw the first merger of two globally systemically important banks – as designated by the Financial Stability Board – in the first half of last year.

After that, UBS posted two consecutive quarters of losses due to the cost of absorbing its rival.

Investors cheered the takeover this summer, sending UBS shares up by more than two-thirds since it bought Credit Suisse in March 2023. However, UBS shares have since lost ground amid recent turmoil in global markets.