UBS shares tumble after results as bank looks to take out more Credit Suisse costs

By Barbara Kollmeyer

UBS Group shares on Tuesday were headed for the worst day since the banking crisis nearly a year ago, after the Swiss bank announced plans to cut billions more in costs as it works to absorb ex-rival Credit Suisse.

U.S.-listed UBS shares (UBS) (CH:UBSG) fell 4.5% to $28.43 per share, which would be the lowest close since early December 2023 if Tuesday's losses stay on track, according to Dow Jones Market Data. A percentage loss of that magnitude would be the biggest since March 23, 2023 when shares slid 6% amid the regional banking crisis that ultimately cost Credit Suisse its independence.

The bank posted a net loss of $279 million for the fourth quarter, following a loss of $785 million in the third quarter. The loss came as the lender incurred around $1.75 billion in expenses related to its integration with Credit Suisse after the latter's near-collapse in March 2023.

UBS reported revenue of $10.855 billion, versus $8.03 billion in the fourth quarter of 2022. Its net loss was wider than the $205 million that analysts polled by Visible Alpha expected, while revenue fell short of the $11.06 billion expected.

UBS said it is targeting $13 billion in savings by the end of 2026, and while job reductions were not mentioned, some read between the lines of a statement by Sergio Ermotti, group CEO:

"As we move to the next phase of our journey, we will focus on restructuring and optimizing the combined businesses. While our progress over the next three years will not be measured in a straight line, our strategy is clear. With enhanced scale and capabilities across our leading client franchises and improved resource discipline, we will drive sustainable long-term growth and higher returns," he said.

UBS reduced its combined workforce in the fourth quarter by 4,000, with year-to-date reductions at 17,000.

-Barbara Kollmeyer

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02-06-24 1039ET

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