UBS posts bigger loss than expected as it absorbs Credit Suisse

ZURICH, SWITZERLAND — UBS on Tuesday posted a larger-than-expected loss in the third quarter as it integrates Credit Suisse following its takeover of its fallen Swiss banking rival.

Net loss stood at 785 million dollars (732 million euros). Analysts surveyed by the AWP agency had been expecting a loss of 430 million dollars.

Switzerland’s largest bank UBS was in March strong-armed by Swiss authorities into a US$3.25-billion takeover of Credit Suisse, to keep its closest domestic rival from going under.

At the time, investors had gasped at the risks UBS was taking on with the purchase.

But by August, the bank said it would not need the billions in support offered by the Swiss government and central bank to offset any surprises that might pop up in its stricken rival’s accounts.

On Tuesday UBS Chief Executive Officer Sergio Ermotti said that “We are executing on the integration of Credit Suisse at pace and have delivered underlying profitability for the Group in the first full quarter since the acquisition.”

UBS said that the third quarter included integration-related expenses of US$2 billion, adding that “we have now stabilised Credit Suisse and continued to grow our franchise”.

Some US$22 billion of the US$33 billion of net new deposits had come from Credit Suisse, UBS said.

— AFP