The turmoil in the banking ecosystem from the United States as it concerns Silicon Valley Bank (SVB) stirred a ripple effect that was felt in Switzerland. The shares of Swiss multinational banking giant UBS Group AG (SWX: UBSG) are seeing a mild slump today after the firm revealed that its net profit for the first quarter took a significant hit. While still largely profitable, UBS said the net profit for the quarter dropped by 52% over the past year to .03 billion. UBS said the drop in revenue was fueled by the more prolonged US residential mortgage-backed securities litigation matter. The legal tussle cost the firm a total of 0 million in the quarter. While many may see the litigation and its accruing costs as a negative one, UBS CEO Sergio Ermotti believes the case is just about
Topics:
Benjamin Godfrey considers the following as important: Altcoin News, Business News, credit suisse, Market News, News, Stocks, UBS, ubs stock
This could be interesting, too:
Steve Muchoki writes Binance Founder Changpeng Zhao Apologizes in Letter to Presiding Judge Ahead of Upcoming Sentencing
Temitope Olatunji writes Figment Soars with Record-Breaking Growth in Q1 2024 and Expanded Staking Services
Chimamanda U. Martha writes Strike Launches Crypto Payment Services in Europe
Godfrey Benjamin writes Ripple IPO: David Schwartz Makes Key Expose on His Stock Option
The turmoil in the banking ecosystem from the United States as it concerns Silicon Valley Bank (SVB) stirred a ripple effect that was felt in Switzerland.
The shares of Swiss multinational banking giant UBS Group AG (SWX: UBSG) are seeing a mild slump today after the firm revealed that its net profit for the first quarter took a significant hit. While still largely profitable, UBS said the net profit for the quarter dropped by 52% over the past year to $1.03 billion.
UBS said the drop in revenue was fueled by the more prolonged US residential mortgage-backed securities litigation matter. The legal tussle cost the firm a total of $660 million in the quarter. While many may see the litigation and its accruing costs as a negative one, UBS CEO Sergio Ermotti believes the case is just about getting set to be closed.
“We are in advanced discussions. Hopefully, we can close this 15-year-old chapter very soon,” he said.
UBS impressed on some of its key growth metrics for the quarter in consideration of the outlook of the global financial ecosystem in Q1. The Swiss giant said it generated total revenue of $8.75 billion as against the $9.38 billion scored in the year-ago period. However, UBS revealed its operating expenses for the quarter soared from $6.6 billion a year ago to $7.2 billion in the past quarter.
According to Ermotti, the performance of the company in the quarter is “very solid,” a testament to the bank’s ranking as one of the dominant commercial banks in Switzerland and in the European Economic Area (EEA). The company said its Global Wealth Management unit reported as much as $28 billion in new money, an influx that can be described as a vote of confidence from asset managers on the firm’s stability.
UBSG dropped by 2.64% over the past 24 hours and is changing hands at 17.72 Swiss Francs.
UBS Profit Unhindered by Credit Suisse
The turmoil in the banking ecosystem from the United States as it concerns Silicon Valley Bank (SVB) stirred a ripple effect that was felt in Switzerland, ending the more than 160-year solvency of Credit Suisse Group AG (SWX: CSGN).
Seeing the harsh bank run Credit Suisse was facing, Swiss regulators quickly initiated an acquisition of the firm by UBS. In the current performance report, Ermotti noted that it is believed that investors and the bank’s customers understood that UBS is part of the solution to Credit Suisse and not the profit, and as such, its profit was relatively unaffected by the takeover deal.
“We saw some inflows coming from Credit Suisse, but, most importantly, we continue to see even after the transaction, we saw inflows, so the demonstration that our clients believe we are a source of stability,” he said in an interview with CNBC. “We are part of the solution and not part of the problem.”
The takeover is set to be completed by the end of this year and full system absorption is billed for 2-4 years from now.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.