UBS paid $3 billion for Credit Suisse, which reported around $43 billion in equity.
(Photo: Reuters)
Zurich “Brilliantly negotiated”, “bargain”, “deal of the century”: Analysts and bankers quickly agreed that the emergency takeover of Credit Suisse would be worthwhile for UBS at a price of three billion dollars.
But to what extent will the largest Swiss bank and its shareholders benefit from the deal? Even experts find it difficult to make an exact estimate. UBS itself has a great incentive to initially set the profit as low as possible. Because a profit that is too high is explosive for the bank.
One thing is already clear: this year, UBS is likely to report a record-high balance sheet profit, which will also give the bank a lot of leeway in the long term. This is due to an extremely rare balance sheet item: the so-called “badwill”, i.e. the difference between the purchase price paid and Credit Suisse’s equity on the balance sheet.
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