UBS revs up buybacks amid Credit Suisse merger, profitable progress

UBS, one of the world’s leading banks, has announced the resumption of share buybacks and greater cost-saving measures as it begins its absorption of rival Credit Suisse. Last year, Credit Suisse collapsed and UBS stepped in to acquire it for $3.3 billion, helping prevent potential devastation to the global financial system. UBS now expects to generate $13 billion in cost savings by the end of 2026, with more than half of these savings coming from a reduction in headcount. The bank’s share buybacks scheme, which was delayed following the Credit Suisse acquisition, will recommence with up to $1 billion in the second half of 2024.

Key Points:

• UBS resumes share buybacks and implements cost-saving measures as it absorbs Credit Suisse.
• The bank expects to generate $13 billion in cost savings by the end of 2026, with more than half of the savings coming from job cuts.
• The share buybacks scheme, which was delayed due to the Credit Suisse acquisition, will recommence with up to $1 billion in the second half of 2024.

As UBS integrates Credit Suisse into its organization, cost-cutting efforts and share buybacks are necessary to maintain profitability. The bank aims to achieve $13 billion in cost savings by the end of 2026, with $6.5 billion expected to be saved by the end of 2024. To achieve these targets, UBS plans to reduce headcount through automation and other cost-saving measures. The merger with Credit Suisse resulted in a reduction in UBS’ employee count from 120,000 to 112,000 by the end of 2023.

The integration of Credit Suisse is not yet complete, and UBS still faces challenges in executing additional job cuts and combining IT systems. However, UBS CEO Sergio Ermotti remains confident in the bank’s ability to drive sustainable long-term growth and higher returns. The resumption of share buybacks, which were delayed due to the acquisition, is expected to begin in the second half of 2024 with up to $1 billion.

In summary, UBS has resumed share buybacks and implemented cost-saving measures as it absorbs Credit Suisse. The bank aims to achieve significant cost savings through job cuts and automation, with a target of $13 billion by 2026. The resumption of share buybacks, which were delayed due to the acquisition, is expected to start in the second half of 2024. UBS remains committed to driving long-term growth and higher returns despite the challenges of the integration process.