UBS today provided an update on the integration of Credit Suisse. UBS said it made substantial progress related to the integration of Credit Suisse in the second quarter of 2024.

The merger of UBS AG and Credit Suisse AG was completed on 31 May 2024. UBS AG succeeded to all rights and obligations of Credit Suisse AG, including all outstanding Credit Suisse AG debt instruments.

On 1 July 2024, UBS completed the merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG. UBS Switzerland AG succeeded to all rights and obligations of Credit Suisse (Schweiz) AG.

The merger of UBS AG and Credit Suisse AG and that of UBS Switzerland AG and Credit Suisse (Schweiz) AG are critical steps in enabling us to unlock the next phase of the cost, capital, funding and tax benefits UBS expects to realize by the end of 2026. They will facilitate the migration of clients and operations to integrated UBS platforms over time, in line with business-, client- and product-specific requirements.

The measurement period adjustments effected under IFRS Accounting Standards in the second quarter of 2024 resulted in a decrease in provisional negative goodwill to USD 27.3bn from the USD 27.7bn previously reported in the UBS Group Annual Report 2023. Retained earnings have been revised to reflect the impact on the prior-period income statement of net USD 0.5bn.

With the measurement period adjustments and the finalization of the amount of negative goodwill in the second quarter of 2024, the accounting for the acquisition of the Credit Suisse Group is complete. In the second quarter of 2024, UBS realized an additional USD 0.9bn in gross cost savings, for a total of around USD 6bn in annualized exit rate gross cost savings compared with the 2022 combined cost base of Credit Suisse and UBS. UBS now expects to achieve around USD 7bn of gross cost savings by the end of 2024, or around 55% of its ambition of around USD 13bn by the end of 2026.

In the second quarter of 2024, Credit Suisse (Schweiz) AG fully repaid the funding drawn under the Emergency Liquidity Assistance (ELA) facility, reducing the amount of funding outstanding under the ELA facility from CHF 19bn to zero.

In June 2024, the Credit Suisse supply chain finance funds (the SCFFs) made a voluntary offer to the SCFFs investors to redeem all outstanding fund units. The offer expired on 31 July 2024, and fund units representing around 92% of the SCFFs’ net asset value were tendered in the offer and accepted. Fund units accepted in the offer were redeemed at 90% of the net asset value determined on 25 February 2021, net of any payments made by the relevant fund to the fund investors since that time. Investors whose units were redeemed released any claims they may have had against the SCFFs, Credit Suisse or UBS.

On 13 August 2024, UBS entered into an agreement to sell Select Portfolio Servicing, the US mortgage servicing business of Credit Suisse managed in the Non-core and Legacy business division. Completion of the transaction is subject to regulatory approvals and other customary closing conditions. The transaction is expected to close in the first quarter of 2025.

UBS Group does not expect to recognize a material profit or loss upon completion of the transaction. Based on balances as of 30 June 2024, the completion of the transaction would reduce the Group’s risk-weighted assets by around USD 1.3bn and the Group’s leverage ratio denominator by around USD 1.7bn.