UBS, the Swiss investment bank, has seen a significant turnaround in its M&A division. After a challenging period last year, where revenues were down 58%, the bank has managed to rescue Credit Suisse’s M&A bankers and achieve a 40% increase in M&A revenues in the third quarter of this year. However, this success comes amidst a backdrop of financial difficulties for UBS, as it registered a $785 million loss in Q3 compared to a $1.7 billion profit in the same period last year.
In an effort to improve its financial situation, UBS has been implementing cost-cutting measures. The bank has already reduced its run rate by $3 billion in the first nine months of 2023 and aims to achieve $10 billion in gross cost savings by 2026. This includes significant headcount reductions, with 13,000 people already being cut this year, including contractors, consultants, and outsourced employees.
While more job cuts are expected, UBS is also assimilating Credit Suisse employees onto its platforms. The integration process has incurred expenses of $1 billion, which includes awards granted to employees for retention and operational stability, severance expenses, and aligning Credit Suisse processes with UBS’s compensation framework. An additional $1 billion of integration expenses is anticipated in the fourth quarter.
Despite the success of UBS’s M&A bankers, it is unlikely that they will be rewarded with significant bonuses. Their revenues are down 1% year-to-date, although this is still better than the market average. On the other hand, fixed income traders at the bank have experienced a 37% decline in revenues in Q3 compared to last year.
UBS has made provisions for paying its employees and accrued higher variable compensation in the third quarter. However, overall bonuses for the full nine months are lower than last year, which were also not considered great.
Overall, UBS’s M&A division has shown promising growth, but the bank still faces financial challenges and is actively implementing cost-cutting measures to improve its financial position.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | UBS, Credit Suisse |
| Currencies | None |
| Securities | None |
