UBS shares pop 9% as Swiss bank returns to profit after Credit Suisse takeover

UBS on Tuesday reported a swing back to profit after two quarterly losses as it smashed first-quarter expectations, with results bolstered by higher wealth management revenues.

Shares were 9% higher at 8:48 a.m. London time, returning some of April's losses. UBS shares soared 51.7% last year but have had a more lackluster start to 2024.

Lower expenses and consolidation benefits following the takeover of Credit Suisse in June 2023 also helped the bank post a net profit of $1.8 billion in the first quarter, ahead of a consensus forecast in an LSEG poll of $721.4 million.

The Swiss banking giant is continuing to process the mammoth integration of its former rival. The firm said Tuesday that it expects to complete the merger of UBS and Credit Suisse into a single U.S. intermediate holding company in the second quarter, and the merger of its Swiss entities in the third quarter.

Group revenue in the first quarter totaled $12.74 billion, also higher than expected and up from $10.86 billion in the fourth quarter of 2023. Revenue in its flagship Global Wealth Management unit rose 28% to $6.14 billion, where net new assets came in at $27.4 billion.

The bank's CET1 capital ratio, a measure of liquidity, was 14.8%, compared to 14.4% the previous quarter.

"We are very pleased because we are making very good progress in our integration plans," UBS CEO Sergio Ermotti told CNBC's Silvia Amaro on Tuesday.

The bank meanwhile returned to strong reported net profitability and underlying profitability while strengthening its capital, Ermotti said, adding that there was "still work to be done for the rest of the year."

Johann Scholtz, analyst at Morningstar, said the strong revenue growth at UBS had particularly pleased investors.

"The market was