The bank expects a negative impact of $13 billion from fair value adjustments to the assets and liabilities of the combined group.
The bank also expects to incur $4 billion in potential litigation and regulatory costs resulting from capital outflows.
But the bank’s financial reserves will help it absorb potential losses and could lead to higher profits in the second quarter of the year if UBS closes the deal next month as planned.
Last March, the Swiss government announced the details of the acquisition agreement, which included a $100 billion liquidity line for the two banks as part of the deal. The Ministry of Finance also provided a government guarantee of approximately $10 billion to resolve any issues that may arise. occur in the “Credit Suisse” portfolios.
The value of the transaction was $3.24 billion payable in shares, or $0.84 per share, after the value of “Credit Suisse” stock before the execution of the transaction was $2.07.
The Swiss government considered the agreement necessary to avoid turbulence in the global banking sector, and the Swiss president underlined at the time that this solution “is not only crucial for Switzerland, but also for the stability of the entire financial system” in the world.
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