Breaking News
Get 40% Off 0
🔎 See NVDA full ProTips for an instant risks or rewards Claim 40% OFF

Credit Suisse Anticipates Q3 Loss Following UBS Takeover

Published Sep 29, 2023 22:06
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
CSGN
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
UBSG
+0.60%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Credit Suisse, now a part of UBS, expects to report a third-quarter loss of approximately $1.6 billion due to the reclassification of loans related to its non-core and legacy businesses, as announced on Friday. The bank also foresees a potential loss of up to $600 million from the decision to wind down certain management arrangements in the same quarter.

Earlier this year, in March, UBS agreed to acquire Credit Suisse for three billion Swiss francs and take on up to five billion francs in losses. This move was part of a rescue effort coordinated by Swiss authorities as Switzerland's second-largest bank was teetering on the brink of collapse. Post-acquisition, UBS determined which Credit Suisse assets it would keep and which would be transferred into a non-core and legacy division for gradual winding down.

Lukas Gehwiler, UBS' vice chairman, suggested earlier this month that Credit Suisse might incur additional losses in the second half of the year. In response to potential losses from ongoing litigation, Credit Suisse increased its provisions to 1.48 billion Swiss francs, up from 1.367 billion francs reported in its half-year figures at the end of August.

The bank is currently involved in several cases, including its dealings with US family office Archegos Capital Management and loans granted to Mozambique for the development of its fishing industry.

In its financial report for the first half of 2023, Credit Suisse reported net asset outflows of 100.3 billion Swiss francs from the end of 2022. The wealth management business experienced the largest outflow with 74 billion francs withdrawn across all regions.

UBS shares listed in Zurich were minimally impacted by the news, even showing a slight increase around noon on Friday. Since the announcement of the Credit Suisse takeover in March, the UBS share price has risen by over 30%. According to InvestingPro data, the UBS share price has seen a significant return of 34.98% year-to-date and a 71.79% return over the last year. The company's market capitalization stands at $80.4 billion USD, with a P/E ratio of 2.35.

InvestingPro Tips for UBS highlight that the company is profitable over the last twelve months and has been trading at a low Price/Book multiple. This suggests that despite the potential losses from the Credit Suisse acquisition, the company maintains a strong financial position. For more insights like these, readers can visit InvestingPro which offers 8 additional tips for UBS.

As of June, Credit Suisse had a workforce of 33,968 employees, marking a reduction of about 13% compared to the same period a year earlier. According to InvestingPro, UBS's next earnings date is slated for November 7, 2023, where more detailed financial insights will be revealed.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Credit Suisse Anticipates Q3 Loss Following UBS Takeover
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email