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For the first time since the CS takeover last March, the new mega-bank is presenting its annual results today. What to expect?
One thing can be said with certainty: UBS has become larger after swallowing CS. But a larger bank, with more customers and more income, does not automatically make more profit.
Consolidation costs
The experts are actually expecting another loss for the fourth quarter, as in the third quarter.
Legend: Experts expect a loss for UBS in the fourth quarter. Keystone/Michael Buholzer
The reason: UBS is spending billions to integrate CS. She is combining the IT systems of the two banks and is continually reducing staff, which is costing money.
Major UBS construction site
At the same time, CS’s oversized and risky investment banking is to shrink. This also initially causes costs. Only later will there be more profit at the end of the day.
For the time being, UBS resembles a major construction site; it is being diligently rebuilt and reorganized. At the same time, management is careful to ensure that the bank exudes solidity and inspires trust, especially among customers.
Financial analysts will look very closely when the bank discloses today whether and how much additional customer money has flowed into the bank.
The new goals of CEO Sergio Ermotti are also eagerly awaited. Essentially, it’s about how long it will take for Ermotti to make the hoped-for profit from the takeover of CS.