April 25 (UPI) — Net profit at Switzerland’s UBS bank plunged by more than 50% in the first three months of this year to $1.04 billion, the banking giant’s first-quarter results out Tuesday show.

The massive fall was due not to its emergency takeover in March of troubled rival Credit Suisse, but the setting aside of $665 million in provisions to cover costs arising from a lawsuit related to U.S. mortgage-backed securities dating back to the financial crisis, says UBS’ first quarter report.

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General and administrative expenses were also up sharply, jumping $857 million to $2.07 billion.

The bank is in advanced negotiations with the litigants to resolve the dispute that Group CEO Sergio Ermotti believes will bring the 15-year-old matter to a close.

Describing the bank’s first results since its $3.7 billion acquisition of Credit Suisse as “solid,” Ermotti said the bank’s underlying performance and strong inflows demonstrated that UBS continued to be a source of stability for its clients during periods of significant uncertainty.

“Our balance sheet for all seasons and a diversified and capital-generative business model allowed us to be part of the solution in a critical moment for the Swiss and global financial system,” wrote Ermotti in his foreword to the report.

UBS posted inflows of $42 billion in the first quarter, including $28 billion of new money that flowed into its wealth management business, $7 billion of it arriving in the final 10 days of the period following the Credit Suisse takeover on March 19.

Revenue, however, fell to $8.75 billion from $9.38 billion in the same period in 2022 while expenses rose to $7.2 billion from $6.6 billion a year ago.

“We saw some inflows coming from Credit Suisse, but, most importantly, we continue to see even after the transaction, we saw inflows, so the demonstration that our clients believe we are a source of stability,” Ermotti told CNBC.

UBS said it expected the merger with Credit Suisse, which is due to be completed in May pending regulatory approval, to strengthen its position as a leading and “truly global” wealth manager, with around $5 trillion in invested assets.

“We also expect to reinforce our position as a leading universal bank in Switzerland and to enhance our complementary investment banking and asset management capabilities, while adding strategic scale in the most attractive growth markets,” the bank said.

The results come a day after Credit Suisse reported outflows of $69 billion in the first quarter in a run on the bank that culminated in the emergency rescue deal brokered by the government, central bank, and Swiss Financial Market Supervisory Authority.

Credit Suisse posted a pre-tax profit of $14.3 billion, thanks to the write-off of $16.8 billion of Additional Tier 1 capital notes ordered by FINMA to facilitate the merger with UBS. Without the write-off, the bank would have posted a $1.4 billion loss.

The bank said that the outflows were continuing despite stabilizing to much lower levels.