UBS estimates $35 billion gain from buying Credit Suisse, the latest huge boost to megabanks

By Steve Goldstein

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 (UBS) made with the backing of the Swiss government. UBS is buying Credit Suisse (CSGN.EB) 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 (FCNCA) posted a gain of $9.8 billion from acquiring Silicon Valley Bank.

JPMorgan Chase (JPM) posted a gain of $2.6 billion from its acquisition of First Republic Bank.

HSBC (HSBA.LN) booked a gain of $1.5 billion from buying the U.K. assets of SVB for 1 pound.

-Steve Goldstein

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05-17-23 0745ET

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