Published by Global Banking & Finance Review®
Posted on March 17, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleUBS's auditors issued an adverse opinion on its financial reporting controls due to inherited issues from Credit Suisse, highlighting integration challenges.
By Stefania Spezzati and Tommy Reggiori Wilkes
LONDON (Reuters) -UBS's auditors have expressed an "adverse opinion" on the bank's internal controls over its financial reporting for 2024 after it failed to resolve issues related to misstatements inherited from Credit Suisse, the Swiss lender said on Monday.
An adverse opinion - a rare rebuke for a global bank - is generally understood to be a warning to investors that indicates that a company's financial statements could be misrepresented, misstated, and do not accurately reflect its financial performance and health.
UBS has been working to resolve issues in Credit Suisse's internal controls and said last year it was still reviewing potential misstatements after acquiring the lender in a government-orchestrated rescue in 2023.
In its annual report published on Monday, UBS said that following the merger of the two banks last year, it could no longer exclude Credit Suisse from its assessment and that it needed more time to resolve the problem.
"As of 31 December 2024, UBS's internal control over financial reporting was not effective because of the material weakness" related to the Credit Suisse business, the Zurich-based bank said.
Ernst & Young, re-elected as UBS's auditor last year, said in its assessment on Monday that because of the effects of this weakness, it had concluded that UBS had "not maintained effective internal control over financial reporting" as of end-2024.
"It's one of the many legacy issues from the Credit Suisse takeover that need to be addressed," said Vontobel analyst Andreas Venditti.
The auditor's warning and UBS' financial reporting issues highlight the enormous challenges the bank faces in integrating Credit Suisse - the biggest banking merger since the 2008 global financial crisis.
Earlier in January, it came close to losing a licence to continue managing U.S. retirement plans over a paperwork error linked to the Credit Suisse integration.
PENDING ISSUES
UBS said it had concluded there was material weakness due to "the increased complexity of the internal accounting and control environment", as well as its ongoing migration efforts and the limited time to show its post-merger integrated control environment was working as it should.
The bank added that since the acquisition, it has executed a remediation program to address the weaknesses and has implemented additional controls and procedures.
It said the remaining material weakness relates to the risk assessment of internal controls. It did not elaborate further on when it aims to fully remediate the issues and any related costs.
A spokesperson for the bank declined to comment further.
Before its rescue, Credit Suisse and U.S. authorities had engaged in a months-long debate over the severity of the bank's reporting deficiencies.
In 2022 the U.S. Securities and Exchange Commission was questioning how Credit Suisse had booked a series of cash flows under its former Chief Financial Officer David Mathers, including share-based compensation, and whether the issues needed to be further escalated.
In mid-March 2023 its finance director Dixit Joshi, who succeeded Mathers in late 2022, told U.S. regulators that Credit Suisse's control deficiencies had "remained un-remediated for several years" and that the bank was reassessing the issues.
A week later the bank imploded, and the issues landed on the desk of UBS's CFO Todd Tuckner.
Credit Suisse's 2022 annual report contained explicit warnings from its auditor PwC on the effectiveness of the bank’s internal controls over financial reporting for that year.
(Additional reporting by Ariane Luthi in Zurich; Editing by Kirsten Donovan and Jan Harvey)
The article discusses UBS's financial reporting control issues following its merger with Credit Suisse.
UBS faces challenges in integrating Credit Suisse and resolving inherited financial control weaknesses.
UBS's auditors issued an adverse opinion on the bank's internal controls over financial reporting.
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