UBS Group AG investors are bracing for plenty of superlatives and drama as the Swiss lender prepares to unveil the first quarterly results since taking over Credit Suisse in an unprecedented government-led rescue.
Five months after agreeing to the deal, Chief Executive Officer Sergio Ermotti is expected to report one of the biggest windfall profits ever recorded by a bank on Thursday, along with potentially billions of dollars in writedowns on assets and details on the future of thousands of jobs.
Giving up the state guarantees may also make it easier for UBS to integrate Credit Suisse’s Swiss business, a contentious issue because it will further strengthen its dominant position at home. UBS had long signaled its preference to keep the domestic unit, but Switzerland’s elections in October had forced executives to downplay their plan.
Globally across the combined firms, some 35,000 jobs are expected to go, most of them at Credit Suisse. Staffers have already been told to expect three rounds of cuts this year, including two tentatively planned for September and October, people familiar with the matter have said. Ermotti said in June that 10% of Credit Suisse’s staff had already left since the acquisition.
Credit Suisse reported 61 billion Swiss francs in asset outflows and a reduction of 67 billion francs of customer deposits for the first quarter. It is expected to report billions more in outflows for the second quarter, people familiar said. The figures may be difficult to decipher because UBS intends to consolidate flows for Credit Suisse and not give a breakdown by unit, one of the people added.
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