UBS Group Shares Soar as Credit Suisse Contributes to Revenue Growth

UBS Group shares experienced a significant surge on Tuesday following the release of their third-quarter results. The results revealed that Credit Suisse, which was acquired by UBS in March, played a major role in driving revenue growth, net new deposits, and net new money for the Swiss banking group.

As of 08:37 GMT, UBS shares were trading 4.3% higher at EUR22.83.

During the quarter, Credit Suisse contributed $3 billion in net new wealth management money, with its clients accounting for $22 billion out of the total $33 billion in net new deposits across UBS’s global wealth management and personal and corporate banking units, according to UBS.

Thanks to the inclusion of Credit Suisse revenues, the core businesses at UBS witnessed revenue growth throughout the period.

Despite the increase in revenue, UBS reported a net loss due to a surge in operating expenses, which can be attributed to Credit Suisse expenses and integration costs. However, on an underlying basis, the bank stated that it achieved a pretax profit of $844 million.

Deutsche Bank analysts Benjamin Goy and Sharath Kumar noted that these results indicate progress in all key areas for UBS and should instill investor confidence in the bank’s integration of Credit Suisse. They stated in a research note, “Net new inflows continued across businesses also in September, the non-core reduction progresses quickly, the cost reduction is ahead of plan, as was the underlying quarterly profit.”

In conclusion, UBS’s third-quarter results have shown promising developments across the board and bode well for the successful integration of Credit Suisse.

This report was written by Pierre Bertrand.