: UBS estimates $35 billion gain from buying Credit Suisse

by | May 17, 2023 | Stock Market

UBS is setting aside $4 billion for possible litigation costs from its acquisition of Credit Suisse, but nonetheless will book $34.8 billion in negative goodwill from the deal. The announcement came in a presentation the bank made on the deal, which UBS

made with the backing of the Swiss government. UBS is buying Credit Suisse

in a deal that is worth the same as it was when announced, 3 billion Swiss francs ($3.4 billion) in stock.

UBS didn’t detail what the matters were that led to the conclusion. The bank said the additional $4 billion in provisions reflects “the possible outflows from litigation, regulatory and similar matters.” The $34.8 billion in negative goodwill represents $48.8 billion in Credit Suisse equity as of the end of 2022, the $3.5 billion deal cost, and $10.6 billion in transaction adjustments. UBS is one of several banks that have recorded big gains by buying banks that have collapsed. First Citizens Bancshares
posted a gain of $9.8 billion from acquiring Silicon Valley Bank. JPMorgan Chase
posted a gain of $2.6 billion from its acquisition of First Republic Bank. HSBC
booked a gain of $1.5 billion from buying the U.K. assets of SVB for 1 pound.

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