UBS deepens cost cuts as it integrates Credit Suisse

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UBS has set out plans for deeper cost cuts as the mammoth integration of rival Credit Suisse helped drive the Swiss bank to a second straight quarterly loss.

Chief executive Sergio Ermotti, parachuted back into the top job to oversee the takeover, had previously described 2024 as a “pivotal year” for the integration, and on Tuesday said UBS would now be aiming for $13bn of cost cuts by 2026, up from $10bn.

The sharper cuts were among several targets UBS announced, as the bank reported a fourth-quarter loss of $279mn, modestly better than the $285mn expected by analysts.

UBS said that it planned to lift assets in its key wealth management business to above $5tn by 2028 and complete the legal merger of both holding companies by the end of June.

Its wealth management business — especially in the crowded but fast-growing US market — is at the cornerstone of its strategy to capitalise on buying Credit Suisse, a deal orchestrated by Swiss regulators almost a year ago.

“2023 was a defining year in UBS’s history with the acquisition of Credit Suisse,” Ermotti said in a statement. “As we move to the next phase of our journey, we will focus on restructuring and optimising the combined businesses.”

In a sign of management’s confidence that they will eventually make the deal pay-off, UBS also said on Tuesday that it would reinstate its dividend of 70 cents a share in May and buy back up to $1bn of shares in 2024. The capital return programme was paused when it acquired Credit Suisse.

UBS shares have risen by 50 per cent since the rescue. At the end of last year, activist investor Cevian Capital took a €1.2bn stake in the group, betting the bank could double its valuation in the next three to five years.

“There is still a lot of work to do,” said Vontobel analyst Andreas Venditti. “The shares’ current valuation offers significant…