UBS expects record profit thanks to CS deal

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UBS chases records: Thanks to the CS acquisition, UBS looks forward to huge record profits. The CS acquisition alone is expected to increase profits by $34.8 billion.

The calculation for the registration mark is done quickly. According to Tamedia newspapers, UBS paid $3.5 billion – or three billion francs – for CS and received a book value of $48.8 billion for it. UBS had to disclose these figures to the U.S. Securities and Exchange Commission Wednesday night. Blick reported the upcoming record profit on April 26.

In detail, UBS added $17.1 billion of its write-off CS Coco bonds to book value, but also saw an impairment loss of $28.3 billion—which includes provisions for legal costs, such as $4 billion in pending CS lawsuits. is showing. . This results in the so-called bad faith of $34.8 billion recorded as profit in the second quarter. These funds will flow into the balance sheet of the new Super Bank. Added to this is the profit that UBS will make in the second quarter.

Never before has a bank made so much profit

Never before in modern banking history has a bank earned so much in a single quarter. The previous record for the US and Europe is around CHF 13 billion, achieved by JP Morgan, the largest bank in the US, in the first quarter of 2021. Only the Industrial and Commercial Bank of China exceeded this value several times.

However, these two banks only hit record values ​​when it comes to UBS, which would be an accounting oddity in the form of book profit, bad faith. This is particularly negative for seller Credit Suisse. When it comes to receiving UBS, this has a positive effect. (smt)

Source :Blick