MILAN Shares in UBS hit their highest level since October 2008 on Thursday, extending a strong run that has put the Swiss bank well ahead of its European rivals following the takeover in March of its struggling rival Credit Suisse.

UBS rallied more than 6% early in Zurich, set for its biggest one-day gain since March, after the group said it would fully absorb Credit Suisse's domestic bank and that it was increasing its ambitions for cost savings to over $10 billion.

"Clearly the group remains a construction site in the near term, however we believe this set of results and announcements should give confidence in the mid-term bull case," said Deutsche Bank analysts in a note.

The stock has risen 36% so far in 2023 against a 13.5% gain for the broader European banking index.

(Reporting by Danilo Masoni; Editing by Amanda Cooper)