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- UBS completed one of the largest bank mergers in March when it rescued failed rival Credit Suisse.
- The bank posted a record $29 billion second quarter profit due to an accounting gain from the deal.
- UBS plans to cut 3,000 jobs and save $10 billion as part of its integration strategy.
UBS posted the biggest quarterly profit for a bank on record following its rescue of Credit Suisse earlier this year.
The $29 billion profit for the second quarter announced Thursday was mostly due to an accounting gain known as negative goodwill following the takeover of its Swiss rival in March.
The assets of Credit Suisse were worth far more than the $3.25 billion that UBS paid in the government-brokered rescue deal, which meant it could book the difference.
The biggest quarterly profit posted by a bank had been $14.3 billion from JPMorgan at the beginning of 2021.
Excluding the post-merger gains, UBS reported a far more modest $1.1 billion pre-tax profit.
The bank is cutting 3,000 jobs in Switzerland by the end of next year and reducing costs by $10 billion as part of its restructuring plans, CEO Sergio Ermotti said.
"There is no room for nostalgic considerations," he told Bloomberg TV. "We are executing on the strategy, we are making very good progress."
UBS plans to eliminate any overlap between the two organizations and eventually stop using the Credit Suisse brand.
Two-thirds of Credit Suisse's investment bank, including almost all of its trading division, is set to be wound down, Bloomberg reported.
UBS is up almost 30% this year and Deutsche Bank analysts Benjamin Goy and Sharath Kumar rate the shares as a "buy."
"The underlying UBS business is seemingly not impacted by the deal," they wrote in a note reported by The AP. "Clearly, the group remains a construction site in the near term, however we believe this set of results and announcements should give confidence in the mid-term bull case."