UBS Group AG (SIX:UBSG) is set to initiate a series of layoffs at Credit Suisse (SIX:CSGN) on November 6, affecting roughly 10% of support roles in compliance, risk, and marketing departments. This move comes in the wake of UBS's acquisition of its Swiss rival Credit Suisse earlier this year, a deal facilitated by the government. Prior to these changes, the joint workforce of UBS and Credit Suisse was estimated to be around 120,000. The layoffs follow previous staffing reductions in management and key revenue-generating operations within the banking and trading sectors.
UBS Group AG, a prominent player in the Capital Markets industry, has been aggressively buying back shares, a move that often suggests management's confidence in the company's future prospects, as per InvestingPro Tips. The company's market cap, as reported by InvestingPro, is a hefty 77073.84M USD, indicating a significant presence in the industry.
In addition to these changes, UBS has appointed Roger von Mentlen to lead both UBS and Credit Suisse's Swiss banks during their integration process. Von Mentlen, who has been with UBS for 40 years and a board member since 2020, will take over from Markus Ronner, who has led UBS Switzerland since last year, and Peter Derendinger, chairman of Credit Suisse's Swiss unit since March 2019.
InvestingPro data reveals a P/E ratio of 2.24 for UBS Group AG, indicating that it is trading at a low earnings multiple. This, coupled with the fact that the company has maintained dividend payments for 12 consecutive years, as highlighted in InvestingPro Tips, suggests that it could potentially be a valuable investment opportunity. The company's dividend yield as of 2023 is 2.29%, with dividend growth of 6.81%.
The legal merger, a decision made by UBS Group in late August, aims to unite UBS Switzerland and Credit Suisse's Swiss business by 2024. The restructured boards, dominated by existing board members and effective from November 1, aim for closely coordinated supervision of the integration. The process will be managed by respective executives until the merger's completion.
InvestingPro Tips also points out that UBS Group has seen a strong return over the last three months, with a 3-month price total return of 18.12%. This indicates a positive trend for the company's stock, despite the fact that revenue has been declining at an accelerating rate, with a revenue growth of --7.07 % as of LTM2023.Q2.
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