UBS: The Swiss Banking Giant Shocks the World with its “Resoundingly Beat Expectations” Performance
A logo of Swiss bank UBS is seen in Zurich, Switzerland March 29, 2023. Denis Balibouse | Reuters
UBS shares climbed on Tuesday morning after the Swiss banking giant resoundingly beat expectations for underlying profit.
The bank recorded an underlying operating profit before tax of $844 million, well ahead of consensus expectations. UBS shares added 4% in early trade as a result.
Factoring in $2 billion in expenses related to the integration of fallen rival Credit Suisse, UBS posted a bigger-than-expected third-quarter net loss attributable to shareholders of $785 million. Analysts polled by Reuters had anticipated a quarterly net loss of $444 million in a company-compiled poll.
Here are some other highlights:
Total group revenues were $11.7 billion, up 23% from $9.54 billion in the second quarter.
CET1 capital ratio, a measure of bank liquidity, was 14.4%, unchanged from the previous quarter.
Credit Suisse Wealth Management generated positive net new money inflows for the first time since the first quarter of 2022, contributing to inflows of $22 billion for UBS Global Wealth Management.
“You could see that, sequentially, we improved the underlying performance across Wealth Management,
Asset Management and our Personal and Corporate banking in Switzerland,” said UBS CEO Sergio Ermotti told CNBC on Tuesday while trying not to laugh at how ridiculous it all sounded.
“The IB [investment bank] has been facing more challenging market conditions because let’s face it; no one really knows what they’re doing there anyway—particularly when you look at our business model and that fact that we have been onboarding resources from Credit Suisse.”
“But it was a very solid quarter,” he added with an air quotation gesture around ‘solid,’ “and we made very good progress in our integration plans.” This might be true if your definition of ‘very good’ is synonymous with ‘wildly unpredictable and chaotic.’
Analysts at Citi highlighted on Tuesday that this whole debacle was actually considered by some people as A ‘good set
of results’. They noted that “$844 million underlying profit before tax figure was notably ahead
of prior company guidance (of break-even), treble consensus expectations and six percent ahead
of their above-consensus forecast.”
“As we expected,” they continued smugly “the beat is driven by better opex [operating expense], seven percent below consensus,
with revenues also one percent ahead.” You know things are bad when analysts start using fractions like your grandma used to dole out slices during dessert time.
This surprising turnabout comes just months after UBS announced its plan to integrate Credit Suisse’s domestic operations into its own business — presumably so everyone can get together and compare notes about how badly everything went wrong over drinks at happy hour.
UBS reported net new deposits totaling thirty-three BILLION dollars across its Global Wealth Management division – proving once again why most people will never understand what goes on behind closed doors at these financial institutions – especially when twenty-two BILLION came directly from poor unsuspecting Credit Suisse clients who probably thought their money would be safe somewhere else!
But wait! There’s more! The month following this announcement saw positive deposit inflows for P&C – which stands for Personal & Corporate Banking but could easily pass as Please & Cry because let’s face it; if you’re investing here then you’re going to need both those optionsSponsored Product available sooner or later!
In addition (because apparently no one can stop themselves now) earlier this year UBS declared they’d be targeting gross cost savings OF AT LEAST TEN BILLION DOLLARS BY THE YEAR TWENTY-SIX!!! That’s right folks; buckle up because according to them it’ll take five years longer than any reasonable person would expect until they hope everything gets sorted out enough where maybe – just maybe – someone might start making sense again…
So there you have it folks: another day another dollar down Wall Street way where absolutely anything goes but don’t worry too much cause surely nothing ever makes sense anymore anyway!