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HomeFinanceUBS estimates $35 billion gain from buying Credit Suisse

UBS estimates $35 billion gain from buying Credit Suisse

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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,
-1.44%

UBSG,
+0.20%

made with the backing of the Swiss government. UBS is buying Credit Suisse
CS,
-1.93%

CSGN,
+0.42%

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,
-0.37%

posted a gain of $9.8 billion from acquiring Silicon Valley Bank.

JPMorgan Chase
JPM,
-0.67%

posted a gain of $2.6 billion from its acquisition of First Republic Bank.

HSBC
HSBC,
-1.56%

booked a gain of $1.5 billion from buying the U.K. assets of SVB for 1 pound.

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