Proactive Investors - UBS Group AG (SIX:UBSG) (NYSE:UBS) plans to cut 3,000 jobs in Switzerland as part of a US$10 billion cost-cutting drive as it continues to bed in rival Credit Suisse (SIX:CSGN).
It would be next to impossible to extract savings from the takeover “without going through people and headcount”, chief executive officer Sergio Ermotti said in a Bloomberg TV interview.
In Switzerland, “we will have around 3,000 jobs that will be made redundant over the next years”.
The news came as the Swiss bank reported a second-quarter net profit of US$29.24 billion, including US$28.93 billion of negative goodwill from the Credit Suisse deal and US$830 million integration-related expenses and acquisition costs.
Excluding the one-offs, second quarter pre-tax profit was US$1.14 billion with a cost/income ratio of 80.3%.
UBS said it had stabilised Credit Suisse with net deposit inflows of US$18 billion in the quarter with momentum continuing into the current quarter.
"Two and a half months since closing the Credit Suisse acquisition, we are wasting no time in delivering value for all our stakeholders from one of the biggest and most complex bank mergers in history," Ermotti said in a statement.
"We are winning back the trust of clients, reducing costs and taking the necessary actions to create economies of scale that will allow us to better focus our resources and target investments for future growth," he added.
The bank’s global wealth management arm recorded its highest second-quarter net new money in over a decade at US$16 billion while the strong capital position was maintained with a CET1 capital ratio of 14.4% and CET1 leverage ratio of 4.8%.
The lender expects cost savings of more than US$10 billion from the merger with a cost:income ratio of less than 70% predicted by the end of 2026.
Third-quarter underlying pre-tax for UBS is expected to be around breakeven.
Shares in the bank advanced 4.8% to CHF23.23 in Zurich on the back of the news.