ZURICH, May 7 (Reuters) - UBS reported net

income of $1.8 billion for January-March, its first quarterly

profit since it took over fallen rival Credit Suisse.

The net income attributable to shareholders for

Switzerland's largest bank was better than a company-provided

consensus estimate of $602 million and compares with a profit of

$1 billion in the same period a year earlier.

UBS also said on Tuesday that it had achieved an additional

$1 billion in gross cost savings in the first quarter, taking

total savings to $5 billion. It is aiming to achieve another

$1.5 billion in savings by the end of the year.

The first merger of two global systemically important banks

- orchestrated by Swiss authorities who feared that

scandal-ridden Credit Suisse was on the brink collapse - was

completed last June after which UBS posted two consecutive

quarters of losses due to the costs of absorbing its rival.

Despite the shot-gun nature of the takeover, investors have

been upbeat about UBS's prospects given the low acquisition

costs and its huge increase in assets. Shares in the bank have

climbed some 40% over the past year.

This year is expected to be a pivotal year for UBS as it

tackles some of the trickier stages of integration such as

combining separate IT systems and legal entities, as well as

migrating clients from Credit Suisse to UBS.