UBS made a hefty loss in the first full quarter since it closed a deal to rescue its stricken rival Credit Suisse, even as the bank attracted billions of dollars in new deposits from customers.
The Swiss lender reported a net loss of $785 million for the June-to-September quarter Tuesday, partly driven by costs tied to the deal, which came in at $2 billion.
Shares in the bank gained 4% in Zurich, as investors cheered strong inflows of client funds.
UBS (UBS) saw $22 billion of net new money flow into its global wealth management business, as it gained new clients and won back assets from those who had pulled funds immediately after the takeover. That figure includes flows into Credit Suisse’s wealth management unit, which turned positive for the first time in 18 months.
Across the group as a whole, UBS attracted net new deposits of $33 billion, with two-thirds of that coming from legacy Credit Suisse clients.
CEO Sergio Ermotti was brought back to helm UBS through its takeover of Credit Suisse within days of the Swiss government-orchestrated deal being announced. He is set to unveil a growth strategy for the bank early next year.
“Our clients have continued to place their trust and confidence in us, contributing to strong inflows across wealth management and our Swiss franchise,” Ermotti said in a statement. “We are optimistic about our future as we build an even stronger and safer version of the UBS that was called upon to stabilize the financial system in March and one that all of our key stakeholders can be proud of.”
“UBS reported another good quarter in our view,” Deutsche Bank analysts Benjamin Goy and Sharath Kumar wrote in a note. “Net new inflows continued across businesses… the cost reduction is ahead of plan, as was the underlying quarterly profit.” They reiterated their call for investors to buy the stock.
— This is a developing story and will be updated.
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