UBS continues to integrate Credit Suisse into its operations, dealing with high general and administrative costs related to the acquisition. 

“There is a significant amount of restructuring and optimization that must take place over the next three years before we can harvest the full benefits of the combination,” Chief Executive Sergio Ermotti said during UBS’ fourth-quarter earnings call today.

Credit Suisse became insolvent in March 2023, along with First Republic and Silicon Valley Bank; UBS acquired Credit Suisse in June 2023. 

UBS bank expects to shut down 30% of Credit Suisse’s apps by Q4 2024, with an additional 60% to be closed down by Q4 2025, according to the UBS earnings presentation. 

Credit Suisse spent $1.8 billion on integration costs in Q4, including $604 million related to real estate and technology assets, UBS Chief Financial Officer Todd Tuckner said during the call.  

The $1.7 trillion bank reported a general and administrative expense of $2.9 million, up 111% year over year, largely due to the “consolidation of Credit Suisse expenses of $963 million, as well as higher technology and outsourcing costs,” according to the bank’s earnings statement. 

THE BIG PICTURE: JPMorgan is in the process of integrating First Republic Bank, which also fell during the 2023 banking crisis.  

First Republic produced “a modest increase in expenses, but with a significantly lower 2024 exit run rate as the result of business integration efforts,” JPMorgan Chief Financial Officer Jeremy Barnum said during the bank’s Q4 earnings call last month.  

Meanwhile, Silicon Valley Bank’s integration with Raleigh, N.C.-based First Citizens Bank is going “better than expected,” Christopher Hollins, head of solution sales and delivery at SVB, a division of First Citizens, previously told Bank Automation News. 

SVB is exploring options for expanding its physical footprint to cater to a new clientele, Hollins said. 

BY THE NUMBERS: In Q4, UBS reported: 

• Total revenue of $10.9 billion, up 35% YoY; 
• Headcount reduced by 17,000 YoY; 
• Net interest income of $2.1 billion, up 32% YoY; and 
• Operating expense of $11.5 billion, up 90% YoY. 

NOTEWORTHY: Like JPMorgan, BNP and ING Bank, UBS is increasing its investment in technology for efficiency and better client experience.   

“We will focus on improving the client experience and lowering the cost to serve by leveraging our already leading technology proficiencies,” Ermotti said. “We will lower our cost to serve by streamlining our operations, decommissioning legacy technology platforms and removing branch duplication.”

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