UBS reaps US$28B in new assets in 1Q; Credit Suisse deal looms

GENEVA –

Swiss banking large UBS mentioned Tuesday it took in US$28 billion of internet new cash for its wealth administration business within the first quarter, with $7 billion of that coming within the days after the announcement of its government-backed takeover of ailing rival Credit Suisse.

The Zurich-based financial institution, which is ready to turn out to be Switzerland’s banking titan after the merger closes in coming months, mentioned underlying pre-tax revenue dropped 22 p.c to $2.35 billion within the quarter in comparison with a 12 months in the past, whereas underlying revenues fell 8 p.c.

UBS mentioned it had purchased again $1.3 billion price of its shares throughout the quarter, and reiterated that the share-buyback program has been briefly suspended forward of the closing of the three billion Swiss franc ($3.4 billion) takeover of Credit Suisse introduced on March 19.

“In the first quarter, we maintained positive momentum across the firm and attracted $28 billion of net new money in GWM (Global Wealth Management), of which $7 billion came in the last 10 days of March, after the announcement of our acquisition of Credit Suisse,” UBS mentioned in an announcement.

The financial institution mentioned it “captured demand” for greater yield into cash market and U.S.-government securities at a time of rising rates of interest that may enhance the return on lower-risk belongings like U.S. authorities bonds.

“We delivered these results during a quarter characterized by persistent concerns about interest rates and economic growth exacerbated by questions about the stability of the banking system, especially in the U.S.,” UBS mentioned. “Against this backdrop, private and institutional investors’ activity remained muted.”

The internet inflows at UBS got here in marked distinction to the 61 billion Swiss francs (almost $69 billion) in outflows that Credit Suisse reported Monday for the primary three months of the 12 months, including that shoppers are nonetheless withdrawing belongings.

The compelled marriage of Switzerland’s two greatest banks — organized by the Swiss government department, central financial institution and monetary markets regulator — was designed partly to assist stabilize the worldwide monetary system that had been roiled by the collapse of two U.S. banks.

The status of 167-year-old Credit Suisse had been pummeled in recent times over inventory value declines, a string of scandals and the flight of shoppers anxious in regards to the financial institution’s future.