UBS said Thursday that it expected to generate $10 billion in savings from a sweeping overhaul of the new global banking giant created by its emergency rescue of stricken rival Credit Suisse earlier this year.
When it announced the takeover in March, UBS said it was targeting cost savings of 8 billion francs ($9.1 billion) a year by 2027, 6 billion francs ($6.8 billion) of which would come from job cuts. It now expects to complete the integration — and achieve the additional savings — by the end of 2026.
The Swiss bank, which has a combined global workforce of nearly 122,000, gave no details on the numbers of likely layoffs as it published second quarter earnings — the first report since it acquired its rival.
But it confirmed plans to retain Credit Suisse's banking operations in Switzerland, and fully absorb those into the newly-merged group, rather than going for a spin-off or IPO. That is likely to stoke fears of big job cuts among the 37,000 or so people the banks employ in the country, because of overlap.
"Our analysis clearly shows that a full integration is the best outcome for UBS, our stakeholders and the Swiss economy," Chief Executive Sergio Ermotti said in a statement. He added that this was "one of the biggest and most complex bank mergers in history."
UBS (UBS) agreed on March 19 to buy Credit Suisse for the bargain price of 3 billion Swiss francs ($3.4 billion) in a rescue orchestrated by Swiss authorities to avert a banking sector meltdown.
UBS posted net profit of $29 billion for the second quarter, reflecting a one-off boost from the acquisition of Credit Suisse at a fraction of its value.
— This is a developing story and will be updated.
