UBS's Credit Suisse integration is nearly done

Earlier this year, UBS announced that it was increasing the money it was spending on the integration of Credit Suisse from $13bn to $14bn. Three and a half years after being acquired, the full assimilation of Credit Suisse will soon be complete.

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In Q2, UBS said it had decommissioned 1,154 apps, saying that was 40% of the target, implying that it had 2,875 applications to remove in total. UBS said today that it decommissioned another 720 in Q3 and predicted it will fully get rid of the entire 2,875 by the end of 2026. 

Most of these decommissioned apps seemed related to Credit Suisse. UBS said in 2023 it had 2,700 Credit Suisse apps to get rid of, implying that just 175 of the 2,875 'non-core and legacy' apps were made by UBS itself. UBS isn't commenting, but it's understood there are plenty more UBS legacy apps in the background. For the moment, those are presumably designated "core." UBS isn't alone. - At Citi, which hasn't assimilated any rivals, there are 6,500 applications legacy applications to get rid of.

The integration of Credit Suisse isn't just about decommissioning IT applications. Also in its Q4 2023 results, UBS said it planned to get rid of ~14,000 trading books by the end of 2026. Today, it said it had wound down 94% of these as of the last quarter. From now on, though, things will be harder. - there are 700 books to go, but UBS said today that it's only targeting the closure of 140+ more books by the end of next year. Presumably, only the trickiest of books remain; the bank said today that it still has $32.6bn in exposure within its non-core and legacy unit.

The good news is that, in the investment bank alone, integration costs have fallen dramatically. Last year, UBS spent $365m integrating Credit Suisse into its investment bank in Q3. This year, that was down to $106m. The bulk of the integration costs in the third quarter were in wealth management, where integration costs were $553m last quarter. There, integration costs were up 28.3% year-on-year.

Next year, integration costs are expected to be lower still. UBS plans to spend $14bn on integration in total and says it will have spent $13.5bn by the end of this year. That only leaves $500m for 2026.

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