Swiss banking giant UBS reported a huge jump in its second-quarter net profit to $28.9 billion, up from $2.1 billion in the year-ago period, buoyed by its takeover of rival Credit Suisse.
The bank said the acquisition resulted in "substantial negative goodwill" which represents the excess of the fair value of assets acquired over the consideration paid.
Total revenues in the quarter rose 7% to $9.5 billion, with Credit Suisse contributing $1.2 billion. Net interest income was up 3% at $1.71 billion.
While integration costs amounted to $724 million, net fee income grew due to a larger asset base post the acquisition. However, other income fell by $671 million.
Operating expenses surged 35% to $8.5 billion mainly due to the addition of Credit Suisse's costs of $1.6 billion.
The lender expects underlying profit to recover in the second half of 2023 supported by cost savings. It targets over $10 billion in reductions by 2025 through the merger.
UBS CEO Sergio Ermotti said the combination will strengthen its global franchise, with the focus on winning back clients and reducing costs through economies of scale.
