updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131hustle domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131wpforms-lite domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131The UBS report for Q3 2023 showed that the company’s net loss increased because of expenses necessary due to the Credit Suisse integration.
Multinational investment bank and financial services company UBS Group AG (SWX: UBSG.SW) has published its report for Q3 2023, showing a disappointing net loss. The banking giant announced $785 million in net loss for the quarter, disappointing the market. Analysts Reuters polled had put the net loss for the quarter at $444 million.
Most of the loss was because of expenses UBS acquired following the recent acquisition of Swiss-based global investment giant Credit Suisse AG. UBS expenses related to the deal hit $2 billion. Nonetheless, UBS CEO Sergio Ermotti spoke about the deal with optimism. In a statement, Ermotti said:
“We are executing on the integration of Credit Suisse at pace and have delivered underlying profitability for the Group in the first full quarter since the acquisition. Our clients have continued to place their trust and confidence in us, contributing to strong inflows across wealth management and our Swiss franchise.”
UBS total group revenues for Q3 2023 climbed 23%, from $9.54 billion in Q2 to $11.7 billion. Also, the bank’s CET1 capital ratio, which indicates liquidity, remained at 14.4% from Q2. Interestingly, Credit Suisse Wealth Management brought net new money inflows ($22 billion) for the first time since Q1 2022.
UBS also had $844 million underlying profit before tax, which Citi analysts noted was higher than the company’s previous guidance, and 6% more than Citi’s forecast. Despite the net loss coming in higher than expected, Citi said the UBS Q3 2023 report was “overall a good set of results”. It also confirmed the Buy/High Risk rating for UBS.
As UBS continues to integrate Credit Suisse’s banking unit, a few changes are expected. For instance, there is a high chance that UBS will retrench, significantly cutting a large percentage of the bank’s employee count.
Nonetheless, UBS said Credit Suisse clients and Personal and Corporate Banking (P&C) divisions contributed $22 billion to its total new deposits of $33 billion across its P&C and Global Wealth Management divisions.
The $3.2 billion deal involved an agreement with the Swiss government to help the acquisition. The government agreed to cover potential losses of 9 billion francs ($9.9 billion) possibly incurred from winding down Credit Suisse. However, the guarantee will only be possible if the losses from liquidation cross 5 billion swiss francs.
The deal also grants Credit Suisse’s shareholders one UBS share for every 22.8 outstanding shares held. This agreement between both giants was necessary because, as it was an emergency acquisition, Credit Suisse shareholders could not vote.
In August, UBS posted a record Q2 2023 profit, interestingly driven by its Credit Suisse acquisition. While analysts expected a net profit of $12.8 billion for Q2, the bank scaled the forecast by more than 120%, reporting an impressive $28.88 billion for the period. Much of this was from $28.93 billion in negative goodwill from the Credit Suisse acquisition. Apparently, UBS had overpaid for several assets, much higher than actual value. Negative goodwill is excess left after the fair value of the purchase price.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
New York banking giant Goldman Sachs suffered its worst earnings miss since 2011, with quarterly profit sinking 66% year-over-year.
Goldman Sachs (NYSE: GS) recently posted its fourth quarter result, showing its worst earnings miss in ten years. Revenue realized for the period ended December 31st came in lower than expected, while expenses and loan loss surged conversely.
For the fourth quarter of 2022, Goldman reported a revenue haul of $10.59 billion versus the consensus estimate of $10.83 billion. In addition, the banking giant earnings per share of $3.32 compared to the much higher $5.48 estimate analysts provided for the same period. According to Goldman, quarterly profit sank 66% from the preceding year to $1.33 billion, or $3.32 per share. This year-over-year decline is a 39% drawdown below the consensus estimate, and the most significant EPS miss since October 2011. Furthermore, although Goldman’s latest revenue fared better at $10.59 billion, it is still 16% off last year’s intake.
Goldman’s shares dropped by more than 6% in early trading.
Despite Goldman’s underwhelming last quarter of 2022, the bank’s CEO David Solomon chose to see things positively. In a company release, Solomon explained:
“Against a challenging economic backdrop, we delivered double-digit returns for our shareholders in 2022. Our clear, near-term focus is realizing the benefits of our strategic realignment, which will strengthen our core businesses, scale our growth platforms and improve efficiency.”
When questioned by an analyst regarding Goldman’s consumer effort missteps, Solomon said the bank tried to do too much too quickly. The Goldman CEO also acknowledged that the company was ill-equipped in some places, which compromised execution.
Also commenting on the Goldman Sachs Q4 earnings miss, Opimas chief executive officer Octavio Marenzi said in an email:
“Widely expected to be awful, Goldman Sachs’ Q4 results were even more miserable than anticipated. Revenues were largely in line with forecasts, but earnings took a big hit. The real problem lies in the fact that operating expenses shot up 11%, while revenues tumbled.”
Furthermore, Marenzi added that Goldman could resort to more cost-cutting and layoffs due to this underperformance.
Goldman said its operating expenses for the latest quarter climbed 11% YoY to $8.09 billion. Causative factors for the jump were higher compensation, benefits, and transaction-based fees. According to reports, these combined expenses also came in roughly $800 million more than analysts had expected for the same period.
Another reason for the disappointing Goldman results is due to a reported $972 million provision for credit losses in the quarter. This figure compared unfavorably with the much smaller $344 million credit loss provision that the banking giant posted a year earlier. Generally, Goldman set aside 50% more than analysts were expecting regarding potential credit card and point-of-sale loan portfolio losses for the quarter.
Goldman’s Asset and Wealth Management intake also slumped 27% from the previous year to $3.56 billion. During this period, the banking giant realized much smaller gains on private equity holdings and debt instrument markdowns.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.