Highlight: "Markets in Review" Issue #5

Is UBS back?

Last year’s takeover of Credit Suisse was one for the books, quite literally. UBS easily broke the quarterly banking record for largest profits, posting a $29 billion profit, doubling the previous record holder, JP Morgan’s quarterly profit of $14 billion.  The share price surged. However, this was linked to a change in the value of the core business of either bank, but merely an accounting gain, largely reflecting the bargain price of $3.4 billion paid for CS. They have, however, reported straight losses since the deal. While some might argue that this is due to increased expenses following the deal, it’s worth considering that they also posted losses before the deal (Q1 2023). This week, UBS announced it would resume share buybacks totalling $1 billion and continue its cost-cutting measures, likely adding to its recent Quarterly headcount loss of 4,000. Are these efforts an attempt to return capital to shareholders, artificially easing concerns, or a strong step toward a potential turnaround?

For a more in-depth account of UBS and its recent developments, read Noele Illien’s article in Reuters.

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