Minor update on UBS and Credit Suisse 👇
UBS Group AG
UBSUBS Group AG expects a financial loss of about $17 billion from its takeover of Credit Suisse Group AG, the bank said in a regulatory presentation as it prepares to complete the rescue of its ailing Swiss rival.
UBS estimates a $13 billion negative impact from fair value adjustments to the combined group's assets and liabilities. It also projects $4 billion in litigation and regulatory costs resulting from the outflow of cash.
However, UBS also estimated a one-time gain of $34.8 billion from so-called "negative goodwill" from the purchase of Credit Suisse at a fraction of book value.
The financial cushion will thus help absorb potential losses and could lead to an increase in the bank's second-quarter profit if UBS closes the transaction next month as planned.
Do you think the $CS+1.0% lenders are reliable and won't just bring UBS problems?
So in the final analysis, if all goes according to plan, UBS will strengthen. But hopefully they won't dig some more scarecrow out of the closet, in the case of UBS and CS I wouldn't be surprised.