The leading banking giant UBS Group AG (NYSE:UBS) today posted its first quarterly loss in six years amid the ongoing integration of Credit Suisse. UBS reported a Q3 2023 net loss attributable to shareholders of $785 million, which exceeded expectations of $444 million. Excluding the takeover-related costs of $2.2 billion, the bank generated a pre-tax profit of $844 million.
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UBS shares gained around 4% in early trading today on its local stock exchange in Switzerland.
UBS Group is a prominent global banking institution offering a wide range of financial services, including banking and wealth management. In a significant development in March 2023, UBS reached an agreement to acquire Credit Suisse, supported by Swiss authorities, as a measure to prevent a potential banking crisis.
Q3 2023 Results: Takeover Costs Drag Down Strong Inflows
UBS has witnessed a positive net inflow of money in its Wealth Management segment since the first quarter of 2022. The influx of $22 billion was mainly due to the bank’s ongoing efforts to attract more customers at better interest rates.
The total revenues for the bank reached $11.7 billion, marking an increase of 23% from the previous quarter. The CET1 capital ratio, which serves as an indicator of the bank’s liquidity, remained stable at 14.4%, consistent with the previous quarter. In terms of deposits, the bank secured a total of $33 billion in net new deposits, of which more than 60% originated from clients previously associated with Credit Suisse.
On the flip side, the Investment Bank segment incurred a loss of $230 million due to a decline in global market revenues and a 50% rise in operating costs, mainly linked to the integration process.
Is UBS a Good Stock to Buy?
After experiencing a setback in March 2023, the UBS share price has notably rebounded, with a trading gain of 31.8% year-to-date on the NYSE.
Overall, UBS stock has received a Moderate Buy rating on TipRanks based on a total of 13 recommendations from analysts. It includes nine Buy, three Hold, and one sell ratings. The average price prediction is $30.93, which is 27% higher than the current price.
