London
CNN
—
UBS has deepened a value slicing drive launched after its emergency acquisition of rival Credit score Suisse, because it slashes 1000’s of jobs and tries to spice up earnings to ensure the mammoth deal pays off.
The Swiss lender stated Tuesday that it was now concentrating on $13 billion in financial savings by the tip of 2026 — $3 billion greater than it introduced six months ago.
The financial savings will present “mandatory capability for reinvestment to bolster the resilience of our infrastructure as we take up Credit score Suisse and to drive sustainable progress by investing in expertise, services,” it added.
UBS (UBS) has already trimmed prices by $4 billion — together with via job cuts — or roughly one-third of the quantity now focused. It slashed headcount within the fourth quarter by greater than 3,100 to beneath 113,000, taking the variety of layoffs introduced final yr above 16,000.
Workers beforehand employed in Credit score Suisse’s funding financial institution made up “a robust half” of the fourth quarter job cuts, chief monetary officer Todd Tuckner instructed reporters on a name. A lot of them have been in the US and United Kingdom, “but additionally unfold throughout the globe,” he added.
Extra job losses are seemingly after the mixed financial institution secures all the required regulatory approvals for the merger, seemingly by the center of this yr. Workers engaged on these duties are “vital to retain till such time because the entities come collectively,” stated Tuckner. “At that time we’ll have a look at what’s required and what’s wanted.”
UBS reported a internet lack of $279 million for the October-to-December interval, its second consecutive quarterly loss, partly pushed by prices tied to the deal. It follows a lack of $785 million for the June-to-September quarter. The financial institution expects to “considerably enhance” its efficiency within the first quarter of 2024, Tuckner stated, with out commenting on whether or not it’ll swing to a revenue.
UBS CEO Sergio Ermotti instructed reporters he was “very completely satisfied” with the velocity at which the combination was progressing however “not complacent.”
“The momentum is nice, however this can be a marathon not a dash,” he stated. “It’s a really advanced integration and we have to at all times look ahead somewhat than look backwards in respect of our successes.”
UBS agreed to purchase Credit score Suisse final March for the cut price worth of $3 billion in a rescue orchestrated by Swiss authorities to avert a banking sector meltdown. The deal, the most important in banking historical past, has created a large Swiss financial institution with property of greater than $1.7 trillion.
Since closing the acquisition in June, UBS noticed $77 billion of internet new cash circulate into its international wealth administration enterprise and attracted the identical internet quantity of deposits throughout the group.
Rising its funding banking presence in the US is a “very clear precedence,” stated Tuckner, noting that the US bankers it had inherited from Credit score Suisse would make a substantial distinction in narrowing the hole with Wall Road rivals.
For 2023 as an entire, UBS reported a revenue of $29 billion, which largely mirrored an accounting acquire booked on the distinction between the knockdown worth it paid for Credit score Suisse and the a lot increased worth of the failing lender’s steadiness sheet.
UBS additionally stated it could reinstate its dividend of 70 cents a share and purchase again as much as $1 billion in shares within the second half of this yr, resuming a program to return capital to shareholders that it had paused following the Credit score Suisse deal.
Ermotti has previously said that 2024 would be the “pivotal” yr within the takeover of Credit score Suisse, with the migration of IT methods presenting enormous dangers as the 2 banks merge operations throughout greater than 50 nations.