UBS today posted its financial report for the first quarter of 2023, with the results heavily impacted by the acquisition of Credit Suisse.

On a reported basis, and including an increase in provisions of USD 665m related to the US residential mortgage-backed securities (RMBS) litigation matter, 1Q23 profit before tax was USD 1,495m (-45% YoY). Net credit loss expenses were USD 38m, compared with net expenses of USD 18m in 1Q22.

Total revenues decreased 7% YoY, while operating expenses increased 9%, driven by the aforementioned provision. The cost/income ratio was 82.5%.

Net profit attributable to shareholders was USD 1,029m (-52% YoY), with diluted earnings per share of USD 0.32. The return on CET1 capital was 9.1%.

In the quarter, UBS repurchased USD 1.3bn of shares under its share repurchase program. The company hastemporarily suspended share repurchases following the announcement of the anticipated acquisition of Credit Suisse, and UBS intends to resume them as soon as possible.

In the first quarter, UBS maintained positive momentum across the firm and attracted USD 28bn of net new money in Global Wealth Management (GWM), of which USD 7bn came in the last ten days of March, after the announcement of the acquisition of Credit Suisse.

UBS also saw USD 20bn in net new fee-generating assets in GWM, USD 14bn of net new money in AM (of which USD 18bn in money market), and CHF 0.9bn of net new investment products for Personal Banking.

UBS made the following comment regarding the Credit Suisse deal:

“We expect the combination with Credit Suisse to strengthen our position as a leading and truly global wealth manager, with around USD 5trn in invested assets. We also expect to reinforce our position as a leading universal bank in Switzerland, and to enhance our complementary investment banking and asset management capabilities, while adding strategic scale in the most attractive growth markets.

We intend to actively reduce the risk and resource consumption of Credit Suisse’s investment banking business. We plan for the combined Investment Bank (excluding assets and liabilities that we define as non-core) to account for around 25% of Group RWAs and to remain focused and strategically aligned to the products and capabilities that are most relevant to our wealth management clients.

While acknowledging the magnitude of, and complexity associated with, the integration and restructuring of Credit Suisse, we believe that this combination presents a unique opportunity to bring significant, long-term value to all of our stakeholders”.