ZURICH: Banking giant UBS said Thursday it would fully absorb the Swiss unit of its recently-swallowed rival Credit Suisse into its operations, without spelling out the implications for job cuts.
Switzerland's largest bank, which was strongarmed into a $3.25-billion takeover of its closest domestic rival in March to keep it from going under, said it aimed to complete most of the integration by the end of 2026, and was eying more than $10 billion in cost savings by then.
"Two and a half months since closing the Credit Suisse acquisition, we are wasting no time in delivering value for all our stakeholders from one of the biggest and most complex bank mergers in history," UBS chief executive Sergio Ermotti said.
The announcement came as UBS posted its second-quarter income statement, presenting its first results since the mega-merger that rocked Swiss banking was finalised in June.
The results were strong for UBS, which posted a towering net profit of $29.2 billion. Credit Suisse took a $10.1 billion loss over the same period.
'Full integration'
Credit Suisse had been plagued by scandals prior to the takeover, which was precipitated by fears that a crisis in regional US banks would cross the Atlantic.
Investors and employees alike have been eager for any clues as to the fate of Credit Suisse's Swiss division, with questions over whether it could continue to operate independently due to the significant overlap with UBS's business in Switzerland.
The answer was no.
"Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders and the Swiss economy," Ermotti said.
"Our goal is to make the transition for clients as smooth as possible," he said.
"The two Swiss entities will operate separately until their planned legal integration for 2024 with the gradual migration of clients onto UBS systems expected to be completed in 2025."
UBS did not immediately indicate what level of job cuts its preferred option could entail, but they could be significant.
The combined banks jointly counted around 120,000 staff worldwide at the end of 2022, including 37,000 in Switzerland.
Credit Suisse suffers $10 bn loss
Even before the results were released, it was obvious the merger combined two banks pulling in diametrically different directions.
While Credit Suisse in recent years has been racking up towering losses, posting a massive 7.3-billion Swiss franc ($8.3 billion) net loss in 2022, UBS posted a $7.6 billion net profit.
And Thursday's announcement showed that Credit Suisse's woes had continued to pile up, with the former second largest bank in Switzerland had suffered a pre-tax loss of 8.9 billion Swiss francs ($10.1 billion) in the quarter.
UBS meanwhile has continued to project strength, announcing earlier this month that it does not need the billions in support offered by the Swiss government and the central bank to go through with the takeover.
But its $29.2-billion profit in the second quarter was heavily distorted by the gigantic takeover, which brought with it a string of exceptional items, and was not comparable with the year-ago quarter.
UBS is now tasked with cleaning house to smooth the integration.
It has already begun paying for its former rival's mistakes.
In July, it dished out $387 million to cover a fine imposed by the US Federal Reserve and the Bank of England over Credit Suisse's failure to adequately manage the risk posed by the US investment fund Archegos, whose dramatic implosion cost the bank $5.5 billion in losses.
In another apparent sign of looming changes at the investment bank, Credit Suisse sent a letter to investment clients, seen by AFP on Wednesday, indicating it would "reduce its volume of new business from September 22", and had begun redirecting its investment clients to UBS for all market