Watching UBS shares amid biggest ever quarterly profit for global bank
Swiss banking giant UBS has posted the biggest-ever quarterly profit for a bank in the second quarter because of its emergency takeover of Credit Suisse.
Second quarter group net profit attributable to shareholders was $28.875 billion versus analysts' estimates of $33.45bln, so it was a disappointment, but the sheer size of the quarterly profit was a direct result of the accounting difference between the $3 billion price UBS paid for Credit Suisse and the value of the acquired lender's balance sheet. Third quarter forecasts are for 'around breakeven'.
(Video Transcript)
UBS quarterly profit
The Swiss banking giant UBS has scored the biggest ever quarterly profit that's ever been seen by any global bank before. It comes as the emergency takeover of Credit Suisse goes through its books. Let's take a look at the figures that we got through. Second quarter group net profit attributable to shareholders was $28.875 billion.
Credit Suisse
Now this is against estimates of $33.45 billion. So it was a disappointment, but the sheer size of the quarterly profit was as a direct result of the accounting difference between the $3 billion price that UBS paid for Credit Suisse and the value of the acquired lender's balance sheet. In reality, there was a second quarter group negative goodwill of $28.9 billion. Third quarter forecasts are for a round break even. Bloomberg's reporting that UBS now commands roughly $5 trillion in client assets, giving it a shot at global primacy in the business of managing the wealthy money.
UBS share price chart
Let's take a look at the share price chart. You can see here we have a new 15-year high. This is as far back as the chart goes on the IG platform. But if you look at other charts, it has been far higher than where we are at the moment, 15 years plus ago. A look at what we've got in terms of the shape of the candle today. We're off the highs, but still we are above the highs that we had back in 2015.
Now, 2326, UBS has confirmed that it will fully integrate the local business of Credit Suisse by next year. And it's seeking something like around about $10 billion in cost cuts. So it is going to be profitable for the company when it sorts out the synergies, when it sorts out the finer details of swallowing Credit Suisse. But overall, UBS is doing well today with a new 15-year high in the stock. Thanks for watching.
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