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UBS has reported its first quarterly profit since taking over Credit Suisse as the Swiss lender begins to reap the benefits of rescuing its former rival.

The group on Tuesday reported $1.8bn in net profit for the first three months of the year, up from a $279mn loss in the previous quarter and almost three times the $602mn expected by analysts.

Its wealth management business was again a powerhouse, attracting $27bn in net new assets as clients returned to the lender after pulling money from both UBS and Credit Suisse last year amid the turmoil triggered by the rescue.

Revenues increased 15 per cent from the previous quarter to $12.7bn, while UBS also trimmed expenses by 5.5 per cent. It generated an additional $1bn in cost savings during the quarter, having eliminated $5bn in costs last year. UBS has said it aims to reduce costs by $13bn by the end of 2026, with a further $1.5bn of savings over the course of 2024.

“This quarter marks the return to reported net profits and further capital accretion — a testament to the strength of our business and client franchises and our ability to deliver significant progress on our integration plans while actively optimising our financial resources,” said chief executive Sergio Ermotti.

While UBS agreed to buy Credit Suisse in March 2023, the deal was not completed until last June. UBS executives have warned of a bruising and lengthy integration process that will take time to bed in. Ermotti, who was parachuted in for a second stint as CEO to oversee the takeover, has previously said that 2024 would be the “pivotal year” for the integration during which most costs would hit.

UBS shares are up 42 per cent over the past year but have fallen more than 12 per cent in the past month since the Swiss finance department proposed significantly increasing the group’s capital requirements.

Swiss finance minister Karin Keller-Sutter has since suggested this could lead to $15bn-$25bn of additional capital for UBS, which has “seriously concerned” the bank, according to its chair Colm Kelleher.

UBS reported $78bn of common equity tier one capital on Tuesday. The bank’s CET1 ratio, which compares its core capital with its risk-weighted assets and indicates its financial resilience, was 14.8 per cent.

The bank said it was on track to meet its 2024 capital return targets and has promised to buy back $2bn of shares from investors.

Police take demonstrators into custody on the campus of the Art Institute of Chicago after students established a protest encampment on the grounds on May 4.

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Police take demonstrators into custody on the campus of the Art Institute of Chicago after students established a protest encampment on the grounds on May 4.

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You’re reading the Consider This newsletter, which unpacks one major news story each day. Subscribe here to get it delivered to your inbox, and listen to more from the Consider This podcast.

1. It’s become a focus during the pro-Palestinian protests.

We’ve heard the term “outside agitators” a lot in the last few weeks as nationwide protests against Israel’s war in Gaza have spread across college campuses.

More than 2,100 people have been arrested at the protests, and New York City officials say nearly half of the 282 people detained at two separate schools this past week are not currently affiliated with either institution.

Mayor Eric Adams has been among the most vocal critics of outsiders, saying they are the reason for the strong police presence on campuses.

“There is a movement to radicalize young people and I’m not going to wait until it’s done and all of a sudden acknowledge the existence of it,” he said — an assertion that many students disagree with.

This narrative of outsiders co-opting protests is not new. Here are times you may have heard it before:

• In 2020, during protests against the police killings of George Floyd and Breonna Taylor.
• During the 2014 Ferguson, Mo., protests after the killing of 18-year-old Michael Brown.
• During the anti-Vietnam War protests.
• To describe Rev. Martin Luther King Jr. during the Civil Rights Movement.

Protesters confront police officers during a pro-Palestinian protest at Emory University on April 25.

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Protesters confront police officers during a pro-Palestinian protest at Emory University on April 25.

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2. The term is vague and adaptable.

The “outside agitator” label is not clearly defined and is somewhat malleable, says Justin Hansford, a law professor at Howard University and executive director of the Thurgood Marshall Civil Rights Center.

Hansford took part in the 2014 protests in Ferguson and says he has visited the recent campus protests against the war in Gaza. He told Consider This that “outside agitators” are usually characterized in three ways:

• They are are bad people
• They are not a legitimate part of the protest or movement
• They are manipulative and are trying to cause trouble

“Using that phrase makes [the protests] seem more dangerous … it really just changes the vision and the image of what the protest is,” he said.

Hansford also makes the distinction between agitators — who may be trying to instigate trouble — and infiltrators — who may belong to an opposing group trying to undermine a cause from the inside.

3. The motivations for using this specific phrase.

Hansford acknowledges that there are outsiders coming to the protests on college campuses. He says history has shown authorities use the phrase “agitators” to create a pathway for a more aggressive response to protests.

“People look to the righteous outrage of folks who see these terrible images — whether it’s George Floyd or what’s happening happening in Gaza — and there’s a certain level of sympathy,” he said. “So it becomes a political risk to be seen as cracking down really harshly on folks who are sympathetic.”

But if authorities can make it seem like they are going after nefarious outside agitators, Hansford said, it then goes over more smoothly politically.

To understand how the term was used against Martin Luther King Jr. and other Black protesters, listen to the full Consider This episode by tapping the play button at the top of the page.

US stocks started the week on an upbeat note, closing more than 1 per cent higher as investors continued to price in interest rate cuts before the end of the year.

The benchmark S&P 500 gauge added 1 per cent on Monday, while the technology-heavy Nasdaq Composite rose 1.2 per cent, with Nvidia, Micron Technology, Meta and Netflix helping to lead the gains.

Government bond moves were relatively muted, with the policy-sensitive two-year yield advancing 0.03 percentage points to 4.84 per cent as the price of the debt instrument edged lower.

Labour market data on Friday showed US employers added far fewer jobs than expected in April, fuelling optimism about rate relief.